Slater and Gordon has announced it has reached settlements worth over $126 million with three of the big four banks and their insurers over consumer credit insurance (CCI).
The three settlements — which remain subject to court approval and are without admission of any wrongdoing — are expected to result in up to a million Commonwealth Bank (CBA), ANZ and Westpac customers being eligible to receive compensation for the CCIs that they were sold.
They include a settlement of $50 million with CBA and Colonial Mutual Life Assurance Society Limited; $47 million with ANZ, OnePath Life, OnePath General Insurance, Zurich and QBE; and $29 million with Westpac, Westpac Life Insurance and Westpac General Insurance.
“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,” said Slater and Gordon class actions senior associate Alex Blennerhassett.
“Class actions are one way people can take on big corporations, including Australia’s Big Four banks.”
According to Slater and Gordon, many of the banks’ customers may have been ineligible or 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.
Furthermore, the law firm stated that some customers may not have 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.
In a statement to the ASX, ANZ said that it will contribute $42 million to the settlement, which it noted is covered by provision held as of 30 September.
Slater and Gordon also previously initiated a class action against NAB and MLC over their CCI policies on behalf of 50,000 customers in September 2018 before reaching a $49.5 million settlement in November 2019.