Slater and Gordon first filed class action claims against Westpac and ANZ in February 2020, based on claims of unconscionable conduct, inappropriate advice, misleading or deceptive conduct and unjust enrichment, alleging that customers were sold worthless insurance by both banks. 

Just a few months later, in June, a third class action was launched by the firm against CBA, after the bank admitted that the insurance products were worthless, despite being sold to hundreds of thousands of customers.

This news followed a similar class action filed by Slater and Gordon against NAB, which settled for $49.5 million in the Federal Court in May 2020, regarding credit card and personal loan insurance.

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Many customers who were sold the insurance products may have been ineligible or were unlikely to be able to make a claim because they were already unemployed or had pre-existing health conditions or disabilities when they took out the insurance. Some also may have never provided their consent to purchase the policies, were not informed that the insurance was optional, and/or were not informed that they would be charged for it.

Slater and Gordon class actions senior associate Alex Blennerhassett said the settlements, which were without admission of any wrongdoing, meant affected CBA, ANZ, and Westpac customers would receive a share of the settlements; $50 million for CBA, $47 million for ANZ, and $29 million for Westpac.

“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.

“Class actions are one way people can take on big corporations, including Australia’s big four banks.”

All of the firm’s CCI class actions were run on a no-win-no-fee basis, meaning group members paid nothing upfront to join.

Lead plaintiff in the CBA proceedings Kristy Fordham was sold Loan Protection by the CBA without requesting it. At the time, she was a single mother of four children, was not working, and had been diagnosed with serious health conditions, including chronic fatigue syndrome and fibromyalgia. This deemed her ineligible to claim the main benefits of the policy.

She was told by a bank employee that if she did not take out the policy, which cost $25 a month, there was no guarantee her loan would be approved — but she was not advised that she would be ineligible to make a claim should she need to. Ms Fordham has since cancelled her policy and welcomed the settlement.

“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 ANZ proceedings Tracey Reilly was sold ANZ Credit Card Protection policies without consenting. She began experiencing financial difficulties several years later after she was diagnosed with a rare form of cancer that impacted her ability to work.

She approached staff at an ANZ branch about entering a payment plan with them when she was advised that she had credit card insurance with the bank. But when she tried to make a claim, she was told she was ineligible because she had pre-existing symptoms that were later diagnosed as cancer.

“I’m glad this has been completed with a great result,” she said.

“Now, at least people can have a portion of what they paid returned to them, as some people are going through a rough financial time, so every dollar will help.”

Lead plaintiff in the Westpac proceedings Roger Kemp cannot recall taking out his Flexi Loan Repayment Protection insurance and already had life, terminal illness and TPD cover through his superannuation policy. Soon after taking out the bank loan, Mr Kemp and his family experienced unexpected medical and financial difficulties, including the premature birth of his daughter and the non-renewal of his employment contract once it ended. 

In addition to being unaware he had the insurance policy, Mr Kemp would have been ineligible to make a claim for the non-renewal of his employment contract because of the policy’s exclusions regarding contract workers.

“Many people are affected by the outcome in these group proceedings as many held CCI policies. I believe that my story pales compared to what some other people were going through,” he said.

“It would have been impossible for me to take on this claim on my own, so I’m grateful to have been able to join forces through this class action with so many other people.”

In a statement confirming the settlement, ANZ said that it had agreed to settle the matter.

“ANZ will contribute $42 million to the settlement, which is covered by provision held at 30 September 2022. The settlement is without admission of liability and remains subject to court approval,” the statement said.