AMP, CBA and BT have been targeted in a set of class actions alleging the groups failed to act in the best interests of consumers, through selling in-house insurance policies charging excessive premiums.
Shine Lawyers has filed a claim in the Federal Court of Victoria this week against AMP Financial Planning, Hillross Financial Services and AMP Life.
The case has followed another class action launched against the wealth giant earlier this week, on the behalf of AMP Financial Planning advisers.
It is one of three class actions the legal firm has said it will file against institutions for exorbitant life insurance policies, with plans to launch claims against CBA and BT in the coming weeks.
Shine has estimated more than half a million consumers were charged excessive premiums and could be eligible to join one of the three class actions.
Craig Allsopp, Shine class actions practice leader said the firms sold unsuspecting customers overpriced in-house life, income protection and TPD cover, despite knowing there were equivalent or better policies with lower premiums available through other insurers.
The law firm has invited customers who have bought an AMP Flexible Lifetime Policy provided by AMP Financial Planning, Charter Financial Planning or Hillross Financial Services to participate in the action.
Similarly, Shine will be going after a CommInsure life or income protection policy provided through Commonwealth Financial Planning-appointed advisers, Financial Wisdom, Count Financial or BW Financial Advice.
Shine has alleged that advisers appointed by the AMP and CBA arms failed to act in their clients’ best interests, by failing to inform them that they could obtain similar or better insurance policies from alternative providers for lower premiums.
It has also claimed the groups incentivised advisers to recommend their in-house insurance policies through commissions and other benefits, resulting in clients paying higher premiums.
It has estimated more than 100,000 AMP insurance policyholders were impacted by the advisers’ recommendations.
AMP has indicated it will be defending the proceedings.
Meanwhile a CBA spokesperson confirmed the group is aware Shine is investigating a potential class action in relation to certain CommInsure policies sold through advisers.
Looking at the BT action, the law firm alleged that since 2014, the group has not acted in the best interests of its members when obtaining group insurance policies – through choosing more expensive policies from a Westpac Life Insurance-related party for super fund members instead of an alternative cheaper provider.
Customers who hold or previously held a BT Super for Life, BT Super for Life Westpac Group, BT SuperWrap, BT SuperWrap Essentials, BT Panorama Super or BT Superannuation Invest Fund plans between 2014 and 2020 have also been invited to come forward.
A Westpac spokesperson commented the group had not been served with any statement of claim and could not comment at this stage.
“We argue all three financial services providers behaved in a way that was unfair and illegal,” Mr Allsopp said.
“The sheer number of people affected by these premium rorts shows we’re not just talking about a few bad apples but systemic misconduct in the industry.”
He added the amount of money lost by customers varied from a “couple of hundred to several thousand dollars”.
“The reality is, without class actions supported by litigation funders, most victims would likely never get their money back,” Mr Allsopp said.
AMP is facing the class action after it was ordered to pay a $5.2 million penalty by the Federal Court in February, when it was found to have failed at ensuring financial planners complied with the best interests duty, by engaging in insurance churn.
Meanwhile Shine has previously lined up other class actions against the institutions in regards to insurance and financial advisers.
In January, it launched a class action against Colonial First State, which alleged the CBA-owned group’s superannuation funds had depleted the balances of hundreds of thousands of members by wrongly charging excessive insurance premiums.
In 2017, the law firm slapped Westpac Life with a class action, on behalf of customers who had purchased insurance issued by advisers at Westpac, St George, Bank of Melbourne, BankSA or BT Advice.
Westpac is defending against the action, which covers life insurance purchased on the recommendation of a Westpac adviser after 21 February 2011.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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