Westpac and ANZ have been hit with a class action by Slater and Gordon over allegations that they sold junk insurance to vulnerable customers.
The suit relates to consumer credit insurance added to credit cards and personal loans issued by ANZ and Westpac. Slater and Gordon alleged that the insurance policies provided little or no benefit to the banks’ customers, but generated hundreds of millions of dollars in revenue for the banks and insurers and were added to loans and credit cards without customer consent.
“Both banks stopped selling this junk insurance last year and ASIC has now outright banned the practice of cold calling potential customers,” said Slater and Gordon practice group leader Andrew Paull.
“These are welcome developments, but not enough has been done to compensate the past victims of these predatory sales tactics. The customers we’ve spoken with trusted the big banks. They were ripped off and continue to be out of pocket after being pressured to sign up to worthless insurance cover.”
Slater and Gordon also allege that many people who were sold the insurance had disabilities, were unemployed, or were critically ill, meaning they weren’t able to claim the policies.
“The customers we’ve spoken with trusted the big banks,” Mr Paull said.
“They were ripped off and continue to be out of pocket after being pressured to sign up to worthless insurance cover.”
The case comes just months after Slater and Gordon settled a similar case with NAB for $49.5 million, and is based on claims of unconscionable conduct, inappropriate advice, misleading or deceptive conduct and unjust enrichment.