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NRMA to face class action for alleged loyalty tax
Slater & Gordon has filed a class action against NRMA over its alleged “loyalty tax”, which was built into base premiums to offset any discounts for being a long-term customer.
Naomi Neilson
In a statement of claim filed in the Victorian Supreme Court, Slater & Gordon has accused NRMA’s parent company, Insurance Australia Limited (IAL), of engaging in misleading, deceptive and unconscionable conduct in its dealings with long-term customers.
IAL then allegedly increased those customers’ base premium.
“We’re alleging that millions of Australians paid premiums year on year for NRMA home insurance on the promise that they were getting a discount,” Hardwick said.
“But in reality, because of the pricing algorithm, long-term customers were unknowingly paying extra in the form of higher base premiums.”
Slater & Gordon has alleged the higher the computer program identified a customer’s perceived price elasticity, the lower the annual premium increases they would receive.
It meant loyal customers faced steeper increases in their premiums
One customer said that after he saw a 58 per cent jump from 2023–2024, he went online, filled in all his details except for his name, and found the same policy being offered for allegedly up to $4,000 cheaper.
He said he has been a customer since 1989 and his loyalty discount had been listed at 22.5 per cent, but he alleges there was no evidence of this in the figures quoted to him by NRMA.
Hardwick said the proceedings should put “all insurance companies on notice” that the alleged conduct will be acted upon.
“Customers are sick of being taken advantage of by big businesses and insurers, so through this group proceedings, consumers are demanding to be compensated for the loss and damage we say they have suffered as a result of IAL’s conduct,” Hardwick said.
The proceedings were issued on a no-win, no-fee basis, with Slater & Gordon flagging it would apply for a group costs order if successful.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
