Millions of Australians have been urged to check if they are eligible for hundreds of thousands of dollars in payouts from big banks for taking out “junk” insurance products.
Australia’s biggest banks have been ordered to pay $10 billion to customers for selling worthless insurance products following findings by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industries in 2019.
The Royal Commission found that Australians were tricked into buying policies such as loan protection and gap insurance.
Bank employees earned a bonus if they sold insurance products; dozens of Australians agreed to pay and others were unaware of the extra cost.
Less well known is that customers of these products will have to request a refund themselves.
Major banks have so far paid out around $40 million to affected consumers.
Customers will also receive compensatory interest payments to account for inflation.
An Australian couple has been awarded a whopping $110,000 after investigations into their mortgage protection.
Australians have been urged to check if they are eligible for a refund that could be worth hundreds of thousands of dollars after customers were sold “junk” insurance (file image)
Teenah and her husband Troy received the huge sum after spending years paying off their mortgage loan only to realize they weren’t reducing their balance.
The couple fought for three years to cancel the dubious insurance, and it paid off: Their loan payments will begin to decrease each week.
“I couldn’t believe it because it seemed like ordinary people couldn’t beat the bank,” Teenah said. 7 News.
‘We’ve put the money directly into the mortgage, so we’ll own our home in one or two years, instead of ten or more.’
Michael James took out a loan in 2007 to pay for a house he bought.
Mr James said he was unaware at the time that the insurance he had purchased was worthless and made a claim to recover his money through insurance refund specialists Claimo.
“I just submitted the paperwork and they responded saying… NAB has said that (I will receive) $12,196,” he said.
Claimo managing director Nathan Mortlock said most customers were not told the extra insurance they purchased was optional.
“What happened was that the value of the loan insurance was included in the total amount of the loan, often at the time of signing, which substantially increased the interest payable,” he said.
“They (banks) can make things quite difficult in terms of the investigations they’re doing,” Mortlock said.
The Daily Mail has contacted Claimo and the Australian Financial Complaints Authority for further comment.
Commonwealth Bank, NAB, ANZ and Westpac have also been contacted for comment.
Claimo has helped Australians claim $5 million in junk insurance refunds and the company has helped more than 1,600 customers request refunds from banks.
Customers who believe they are entitled to a refund after purchasing damage insurance will have to apply for the refund themselves (stock image)
Junk insurance is often sold together with financial products such as credit cards and loans.
These policies provide a guarantee that they will protect your assets, however, they actually provide little or no coverage.