Last year, Slater and Gordon (S&G) stung NAB for nearly $50million over a class action for 50,000 customers who had bought personal loan and credit card insurance.
The court mandated mailing of hundreds of thousands of notices to 440,000 ANZ customers over the weekend is just the latest part of an ongoing saga that launched earlier this year. On February 28th S&G launched a class action against both Westpac and ANZ.
All the major banks have already stopped selling consumer credit insurance with credit cards and personal loans. In July last year ASIC threatened 11 banks and lenders with “significant enforcement action”, having labelled these types of products “extremely poor value”.
Despite the report, CBA and ANZ continued to offer consumer credit with their home loans after it was published.
"ANZ still offers home loan insurance to customers," a spokeswoman for the bank said last year.
"A home loan is one of the most significant financial commitments most people will make in their lifetime, so it’s important customers are able to consider whether insuring their mortgage is right for them.
"ASIC’s report noted that ANZ’s home loan insurance solution had the most favourable claims ratio for this product type among the lenders identified."
The report said that from 2011 to 2018, ANZ paid out 41c in claims for each premium $ paid, compared to CBA’s 28c in the dollar.
Allianz,Suncorp, Swann Insurance and QBE have already all paid compensation to customers for add-on insurance.
