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Commonwealth Bank hit with class action over selling junk insurance
A class action has been filed against Commonwealth Bank, alleging the big four bank sold its customers junk credit card and personal loan insurance.
Tony Zhang
The class action, filed in the Federal Court, completes the round-up of big four banks with CBA being the fourth circled in Slater’s #GetYourInsuranceBack campaign.
Slater and Gordon practice group leader Andrew Paull said the class action gave a voice to those who were vulnerable and duped into buying worthless insurance. It would allow those customers to hold the bank to account for its wrongdoing.
The Commonwealth Bank has admitted that these products were worthless, even though they were sold to hundreds of thousands of their customers.
During the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, it was revealed the bank’s CEO Matt Comyn, had pushed for the bank to stop selling the junk insurance in 2015.
Mr Comyn was, however, told by the then CEO to “temper [his] sense of justice”, and the products continued to be sold until March 2018.
Existing policies, however, have simply been rolled over and many customers are continuing to be charged thousands of dollars in fees for the worthless products to this day.
Mr Paull said he hoped the class action would help the customers get their money back, while keeping corporate giants honest.
“A 2018 review of the Commonwealth Bank’s sale of consumer credit insurance products revealed that more than 200,000 people who were unemployed or not working [full-time] had been sold this type of policy, meaning it was very unlikely they would have been able to claim against the insurance,” Mr Paull said.
“This is reprehensible behaviour by the bank, which has chosen to compensate only a negligible portion of its customers, despite their admission that they knew the insurance was worthless.
“This move to return only a small portion of its [customers’] premiums seems to have been a tokenistic effort to protect the bank’s brand, rather than a genuine attempt to make good its past wrongdoing.
Slater and Gordon said they were still being contacted by large numbers of CBA customers who “should never have been sold the products, yet have never been remediated.”
Mr Paull called on the Commonwealth Bank to do the right thing and properly address the claims brought in this class action by ensuring that all aggrieved customers are compensated.
Consumers who purchased either CreditCard Plus, or Personal Loan Insurance and have paid a premium since 2010 may be included in the class action.
Slaters said the class action is being run on a no-win, no-fee basis.
