Families conned by insurer's cancer lies

Grahame Thomas. Photo / APN

Fictional victim used for sales pitch.

A woman has cold-called thousands of people to sell trauma insurance by posing as a child cancer victim.

Financial adviser Grahame Thomas has admitted to the Herald on Sunday that "Julie" - who describes herself as a solo mother with five cases of child cancer in her family - is a fiction.

Thomas recruited a friend to record Julie's tragic tale, then used an automated calling system to dial thousands of New Zealand numbers and play her sales pitch down the line.

In the message, Julie says she knows the stress child cancer can cause families, which is why she is offering insurance packages with trauma and disability options.

The calling system runs between 11am and 7pm, and calls every number combination in a particular area code.

Thomas, 64, admits Julie does not exist and that he was neither registered as a financial adviser nor enrolled with a complaints resolution scheme, as the law requires.

He said his friend who recorded the message was a single mum and worked in the health industry. But she was not called Julie and her family had not been devastated by cancer.

"It's just a story," he said.

But Thomas said that story was based on his own family history. "Two of our three daughters were struck with a child cancer," he said.

"They were given less than a 50 per cent chance of survival. Since then, we have had a grandchild and second-niece with similar afflictions.

"My grand-daughter is on treatment for cancer, radiation and chemotherapy."

He said Julie's story was inspired by his former wife. After their divorce she was left a solo mother looking after children with cancer.

"Julie was used for her Kiwi accent as my [new] wife is Asian with a non-Kiwi accent."

Thomas' main product is "trauma" insurance, a type of cover that pays out a lump sum when a person has a major health problem that prevents them from working again.

He also sells policies in which a parent gets 20 per cent of their lump sum if they need to care for a child with a long-term sickness. Such policies come with a warning that if you fall behind on payments your previous payments will be lost and the cover forfeited.

Thomas said such a policy would not have benefited his own family because each of the children was diagnosed when still under the age of 3.

This week Thomas was "deregistered" on the Financial Service Providers Register. He said it was because his mail was being sent to an old address.

After being approached by the Herald on Sunday he registered again that day, naming Financial Services Complaints Ltd as his disputes resolution scheme.

Chief executive Susan Taylor said Thomas was not a member of that resolution scheme. But Thomas said he was in the process of doing the paperwork to join the scheme and he had not broken the law because he was yet to finalise any policy cover.

Insurance Brokers Association CEO Gary Young said brokers were required to register with an authorised dispute-resolution scheme before registering as a financial service provider. He said giving financial advice without being registered was illegal, whether or not any customers had been signed up.