The Australian Securities and Investment Commission revealed today that it is likely thousands of customers remain entitled to an unclaimed refund from the Freedom Insurance Remediation Program.
“Remediation programs should not mean people go uncompensated,” said Cat Newton, Assistant Director Policy & Campaigns, Consumer Action.
“This scheme was supposed to clean up the mess created by Freedom’s appalling pressure selling tactics – and it’s disappointing that they have failed to find everyone entitled to a refund.”
Consumer advocates remain concern about poor outcomes for people who deserved compensation through the remediation program.
“We saw confusing communications and unfair decisions from the insurers and consultants running this remediation program, such as refusing valid claims until our intervention, and offers that looked more like an attempt to keep people paying junk policies than compensation,” she said.
“We’re concerned that people who tried to navigate this poorly run remediation program alone may not have got fair—or any—compensation at all.”
Consumer Action pointed to a commitment following the Financial Services Royal Commission* and a recommendation of the 2017 ASIC Enforcement Review Taskforce** for ASIC to be provided with a directions power.
“A directions power would empower ASIC to require a remediation program to be established and ensure that it is comprehensive and effective. This might prevent this sort of mess in the future”, said Ms Newton
“Insurers and their partners put more effort into finding people to flog their junk products, and less effort into finding people owed compensation,” she said.
“This has been a decade-long disgrace – starting with junk funeral insurance policies, which were flogged to unsuspecting consumers using pressure tactics, by sales staff motivated by problematic sales incentives, to a woeful remediation program that failed to clean up the mess,” said Ms Newton.
“Anyone who is concerned about their current or past Freedom Insurance policy should get legal advice and complain to AFCA if needed.”
More information about the remediation program is available here: https://asic.gov.au/about-asic/news-centre/news-items/freedom-insurance-customers-should-come-forward-for-remediation/
* See Government Response to FSRC Final Report, recommendation 2.9 and 7.1
** See ASIC Enforcement Review Taskforce Final Report, recommendations 46-47.