- 3 huge financial institutions will certainly need to pay $126 million for offering dodgy insurance coverage
- CBA, ANZ and also Westpac offered non-mortgage consumer debt insurance coverage to disqualified individuals
- Insurance coverage was silently packed in with brand-new charge card or individual finances
- Law office Slater and also Gordon will certainly call those eligible a share of the payments
Up to a million Australians are entitled to a share of $126million, which three major banks will have to pay for forcing useless insurance on customers.
The Commonwealth Bank (CBA), ANZ and Westpac will be ordered to dole out the eye-watering compensation to customers lumped with consumer credit insurance (CCI) that they neither wanted or could benefit from.
The insurance was frequently bundled in with personal loans or taking out new credit cards but those buying it were often unaware that they could benefit from it because of unemployment or medical conditions.
Some customers were not even told the insurance was optional or that would be charged for it.
Now duped customers are in line for a share of the eye-watering payout after law firm Slater and Gordon reached a class action settlement with the three banks on Monday.
Three majority banks including the Commonwealth (Sydney branch pictured) have agreed to pay $126million to a million customers sold dodgy insurance
Slater and Gordon senior associate Alex Blennerhassett (pictured) said class action lawsuits were a way for ordinary Australians to take on corporate giants such as the big banks
Who is eligible for $126 million payout the banks?
CBA, ANZ and Westpac customers who bought consumer credit insurance (CGI) bundled into personal loans or new credit cards could get a share of the $126million legal payouts agreed to by the banks and the insurers they own.
Those who were not told about CCI, were not told it was optional or that they would be charged for it are now eligible for compensation.
Anyone who could not claim against the insurance because they were unemployed or suffered serious medical complaints are also eligible.
Law firm Slater and Gordon will contact those in line for a slice of the payouts.
Under the agreed terms CBA and its insurer Colonial Mutual Life Assurance Society Limited will have to fork out $50million, while ANZ and its multiple insurers will hand over $47million with Westpac owing $29million.
Slater and Gordon will contact those eligible for a share of the compensation.
Lead plaintiff in the CBA proceedings Kristy Fordham was sold Loan Protection without requesting it.
The single mother-of-four was told her personal loan would not be approved if she did not pay the $25-a-month insurance policy.
This was despite her being ineligible to make a claim against the insurance because she didn’t have a job and suffered multiple medical conditions, including fatigue syndrome and fibromyalgia.
ANZ and insurers it owns will have to pay $47million to those it sold insurance to who did not ask for it and were unaware they were ineligible to make claims against
‘I believe the bank knew full well that we couldn’t benefit from their products, but they deliberately sold them to us anyway,’ she said.
‘We were all so vulnerable or else we wouldn’t have needed loans from them in the first place, yet they took advantage of that, in my opinion.
‘It was behaviour that they made a lot of money from, so it’s about time those of us affected get compensated.’
Lead plaintiff in the Westpac proceedings Roger Kemp and the lead plaintiff in the ANZ proceedings Tracey Reilly, were also met with similar situations.
Slater and Gordon senior associate Alex Blennerhassett said class actions were one way for ordinary Australians to take on corporate giants such as the banks involved in selling the dodgy insurance.
Westpac will pay out $29million to customers it sold consumer credit insurance to as part of a personal loan or a new credit card but who were unaware they couldn’t claim from because of conditions that made them ineligible
‘Taking on the big banks was never going to be easy but we are pleased that we have been able to resolve these group proceedings and that eligible customers will benefit,’ she said.
Ms Blennerhassett said all of the firm’s CCI class actions were run on a No Win, No Fee basis, meaning group members paid nothing up-front to join.
The settlements agreed to by the banks were made without admissions of wrongdoing and are all subject to Federal Court approval.