An Australian multinational bank will be forking out roughly $10 million in refunds over mis-sold consumer credit insurance (CCI), a type of add-on insurance sold with credit cards, personal loans, home loans, and car loans.
The Commonwealth Bank (CommBank) will refund 65,000 customers for selling them insurance for credit card repayments, called CreditCard Plus, despite the customers being unemployed or students, and therefore not eligible to claim for unemployment or temporary and permanent disability cover provided by the CCI. These customers were sold the insurance between 2011 and 2015.
A further 10,000 customers will be remediated some $586,000 in premiums by the bank after they were over-insured for home loan protection CCI taken out with a CommBank home loan between 2007 and 2015.
Search and compare product listings for Consumer Credit insurance from specialty market providers here
In an
ASIC statement, deputy chair
Peter Kell said it was unacceptable that customers were sold insurance that did not meet their needs.
“One of ASIC's priorities is addressing poor consumer outcomes associated with add-on insurance, including CCI. Consumers should not be sold products that provide little or no benefit, and banks should have processes in place that ensure this,” Kell said.
CommBank and its life insurance arm CommInsure identified and reported the issue to the corporate watchdog.
The bank will soon contact CreditCard Plus customers who are eligible for the refund.
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