The Federal Court will distribute notices to 750,000 credit card customers of a big four bank who may be eligible to participate in a class action around insurance mis-selling lodged by a major compensation law firm.
In a statement, Slater and Gordon said it was already representing "hundreds of thousands of customers" as a result of the action against Commonwealth Bank, who the firm alleges were sold insurance against their credit cards or personal loans that were "of little or no value and many customers would never have been able to claim against".
"The class action alleges that many people were led to believe that the insurance was compulsory or free, while others didn’t even know they had been sold it," the firm said.
"The insurance was often sold to people with disabilities, people who were unemployed or people who were chronically ill and therefore likely ineligible to claim. The Commonwealth Bank has admitted that these products were of little value, even though they were sold to hundreds of thousands of their customers."
Although the products had been included as part of a CBA remediation program, "only a small portion of customers were compensated, despite ending the sale of these products in March 2018", Slater and Gordon said.
The firm's practice group leader Andrew Paull said the behaviour of the bank in "[preying] on vulnerable people in the community" had been "reprehensible" and needed to be called out.
"This move to return only a small portion of its customers premiums seems to have been a tokenistic effort to protect the bank’s brand, rather than a genuine attempt to make good its past wrongdoing," Mr Paul said.
Customers who had been sold a consumer credit insurance policy from 1 January 2010 onwards could be eligible for the action, which was filed in the Federal Court in June last year.