Consumer Action Law Centre says today’s announcement from ASIC that CommBank will refund $10 million to people who were mis-sold consumer credit insurance (CCI), after QBE agreed to pay back $16 million for mis-selling last week, confirms this is the tip of a very large iceberg.
‘ASIC’s announcement today is a big win for people who CommBank sold useless insurance to,’ said Susan Quinn, Consumer Action Law Centre Senior Policy Officer. ‘We’re talking about 75,000 people across Australia who will get their money back. But many more have bought junk insurance through banks, credit unions and car yards. We’re talking hundreds of millions of dollars a year. Now It’s time for this racket to come to an end.’
CommBank mis-sold CCI to people who could not have claimed on it because they didn’t meet the employment requirements. They also overpriced CCI on home loans, by basing premiums on higher loan amounts.
‘This is why we call it junk insurance,’ said Ms Quinn. ‘It’s expensive and there are too many potential nasty surprises when you make a claim.’
Consumer Action says its DemandARefund.com website, which helps people demand their money back for junk insurance, has seen a steady rise in claims for refunds on junk insurance as well as rubbish extended car warranties.
‘Today claims through DemandARefund.com topped $700,000,’ Ms Quinn said. ‘People are waking up to junk insurance and saying ‘enough is enough’. DemandARefund.com steps you through what you need to demand a refund and many people have had success using it.’
Today’s CommBank refund announcement follow ASIC’s recent announcements that insurer QBE will refund $15.9 million to people who bought CCI and GAP (guaranteed asset protection) insurance in car yards, and that insurer Virginia Surety will refund $330,000 in life insurance sold in car yards that had no insurer backing.
‘This should be a wake-up call to all banks who sell similar types of CCI on credit cards. Well done ASIC for making sure these companies are accountable for their actions’, said Ms Quinn.
Been ripped off by junk insurance? Head to DemandARefund.com
Bought CCI on your CommBank credit card or home loan?
CommBank must contact customers who are eligible for a refund. This is you if you:
Were unemployed or a student when you took out your credit card CCI, or
took out a home loan for less than you were originally applied for and CommBank didn’t change your CCI premium.
Even if you don’t qualify for a refund under today’s announcement, you can demand a full refund on CCI you were mis-sold at DemandARefund.com.
Bought add-on insurance from QBE?
You can find out if you’re eligible for a partial refund from QBE at the ASIC MoneySmart website. You could get a partial refund plus any interest you paid.
But, if you want to seek a full refund, visit DemandARefund.com
Bought add-on insurance from another insurer with a credit card or loan?
To seek a full refund for add-on insurance or a used car extended warranty, visit DemandARefund.com
If you are not happy with the insurer’s offer or they do not respond within 45 days, you can lodge a complaint with the Financial Ombudsman Service (FOS) online.
- ASIC Commonwealth Bank to refund over $10 million for mis-sold consumer credit insurance http://asic.gov.au/about-asic/media-centre/find-a-media-release/2017-releases/17-268mr-commonwealth-bank-to-refund-over-10-million-for-mis-sold-consumer-credit-insurance/
- ASIC QBE refunds $15.9 million in add-on insurance premiums http://asic.gov.au/about-asic/media-centre/find-a-media-release/2017-releases/17-258mr-qbe-refunds-159-million-in-add-on-insurance-premiums/
- ASIC Virginia Surety to refund over $330,000 to add-on insurance customers http://asic.gov.au/about-asic/media-centre/find-a-media-release/2017-releases/17-189mr-virginia-surety-to-refund-over-330-000-to-add-on-insurance-customers/