Slater and Gordon has today filed class actions against ANZ and Westpac for selling junk insurance to vulnerable customers.
Both class actions have been filed in the Federal Court and will be served on the Big Four banks and their insurers today.
This comes only months after the firm settled a similar case with NAB for $49.5 million, providing compensation to those customers who were mis-sold the insurance.
The class actions are based on claims of:
- unconscionable conduct;
- inappropriate advice;
- misleading or deceptive conduct; and
- unjust enrichment.
The class actions relate to consumer credit insurance added to credit cards and personal loans issued by ANZ and Westpac. It is alleged that the insurance policies provided little or no benefit to the banks’ customers, but generated hundreds of millions of dollars in revenue for the banks and insurers. It is also alleged that the insurance was added to customers’ loans and credit cards without customers’ consent or without them being told it was optional.
Slater and Gordon Practice Group Leader Andrew Paull said: “For too long, banks have abused their power by selling junk insurance products, adding thousands to their customers’ credit card bills or personal loan repayments while providing little or no benefits to the customer.”
“Both banks stopped selling this junk insurance last year and ASIC has now outright banned the practice of cold calling potential customers. These are welcome developments, but not enough has been done to compensate the past victims of these predatory sales tactics.”
“The customers we’ve spoken with trusted the big banks. They were ripped off and continue to be out of pocket after being pressured to sign up to worthless insurance cover,” Mr Paull said.
“Many people who were sold the insurance had disabilities, were unemployed, or were critically ill, and therefore not eligible to claim on the policies.
“Others were led to believe the insurance they bought was free, or mandatory. Neither was the case.”
“The banks enjoyed extraordinary profit margins on these products. Between 2011 and 2018, ANZ paid out claims totaling just 6.9 cents for every dollar they collected in credit card insurance premiums. In comparison, motor vehicle insurance pays out approximately 85 cents for every dollar of premiums.”
Anyone who purchased ANZ Credit Card Insurance, ANZ Personal Loan Protection, Westpac Credit Card Repayment Protection, Westpac Flexi Loan Repayment Protection or Westpac Personal Loan Protection since 2010 may be included in the class action and should visit Slater and Gordon’s website for more information.
The ANZ and Westpac consumer credit class actions will be run no win, no fee and without a litigation funder.