ANZ and Westpac are under fire for selling junk insurance products to “potentially hundreds of thousands of unsuspecting, vulnerable customers”, the law firm has reported.
It comes just days after Slater and Gordon settled a similar case with NAB for $49.5 million, “providing compensation to those who bought the worthless insurance”.
The firm noted that the consumer credit insurance class actions are part of a series of cases following from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which heard that banks were using pressure sales tactics to sell unnecessary credit card and personal loan insurance to vulnerable customers ineligible to make claims under the policies.
Practice group leader Andrew Paull said, “Banks have been abusing their power by selling junk insurance products, adding thousands to their customers’ credit card bulls or personal loan repayments while providing little or no benefits to the customer.”
“Customers who trusted the big banks were ripped off and continue to be out of pocket after being pressured to sign up to worthless insurance cover,” he continued.
“Many people who purchased these insurance products had disabilities, were unemployed, or were critically ill, and therefore not eligible to claim against the insurance products.”
While others “were simply led to believe the insurance they bought was free, or mandatory,” he outlined.
“Neither was the case.”
Slater and Gordon noted ASIC’s finding that ANZ, Westpac and other banks and insurers across Australia have collected over $1.78 billion in premiums on consumer credit insurance products over the last eight years, while returning only 11 per cent of that amount back to consumers in claims made on the policies.
ASIC’s 622 Report also found that ANZ and Westpac were selling consumer credit insurance products which, in some cases, returned even less to customers than the products offered by NAB.
Since 2011, ANZ’s credit card cover has allegedly returned, on average, less than seven cents in the dollar to consumers, while Westpac’s credit card insurance returned less than 12 cents in the dollar.
Products that comprise the class action claims include: ANZ credit cover, ANZ credit cover plus, ANZ loan protection, Westpac credit card repayment protection and Westpac personal loan protection.
Slater and Gordon has indicated that the new class actions will be run on a no win, no fee basis and will not be backed by a litigation funder.
