One of Queensland's largest insurers sent thousands of customers over half a million renewal documents with misleading comparison pricing for more than five years despite customer complaints, ASIC alleges in new proceedings commenced in the Federal Court.
Between September 2019 and December 2024, RACQ Insurance Limited (RACQ) sent more than 570,000 renewal documents to customers containing representations about a 'last period premium' amount that ASIC alleges were false or misleading.
ASIC alleges that, in many cases, the 'last period premium' amount was higher than what customers had paid (or were paying) after negotiating discounts or making a change to their policy that affected the premium, leading to a distorted view of how much their premium was actually increasing.
ASIC Deputy Chair Sarah Court said failures by insurers to deal fairly and in good faith with customers was an enforcement priority for ASIC.
'During a cost-of-living crisis, we believe RACQ misled thousands of customers by including false comparison pricing in their renewal documents.
'RACQ didn't just make it difficult to compare apples with apples, we consider customers were potentially left paying more because their insurance renewal documents gave them a distorted picture of the change in their premium,' the Deputy Chair said.
For example, an RACQ customer received a renewal notice showing their 'last period premium' was $6,930.55 and their new premium was $7,033.57: a 1.5% increase. However, the customer had actually paid a much lower $5,024.18 premium, which meant RACQ was hiking their renewal premium by 40%.
'Customers should be able to look at renewal documents sent by their insurer and take them at face value.
'We are concerned this conduct deprived Australians of the opportunity to compare their renewal information against other insurers to find the best value for money.
'RACQ claims it was providing "pricing transparency" to members and a "more open, fair and honest member experience", but we allege their misleading comparison pricing did the exact opposite,' the Deputy Chair said.
ASIC alleges RACQ knew the 'last period premium' in its renewal documents was misleading customers because the insurer started receiving complaints just two days after commencing the practice.
'Not only do we allege RACQ broke the law, but it was also put on notice by its customers, who complained that the 'last period premium' amount was misleading, yet RACQ did little about it for more than five years,' the Deputy Chair said.
ASIC alleges the misleading 'last period premium' was included on renewal documents for many different types of cover including home and contents, car, caravan, boat and pet insurance.
ASIC will seek declarations, civil penalties and publicity orders from the Court.
