Yahoo Finance CBA, ANZ, Westpac customers to get $126 million in refunds
Customers of Commonwealth Bank (CBA), ANZ and Westpac will receive their share of more than $126 million after a successful class action lawsuit over the sale of junk insurance.
Slater and Gordon said the settlement was reached over consumer credit insurance (CCI) that was sold to customers when taking out credit cards or personal loans.
The three settlements, which are still all subject to court approval, are expected to result in up to 1 million CBA, ANZ and Westpac customers being eligible to receive compensation for CCI they were sold.
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Many customers may have been ineligible or were 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, Slater and Gordon said.
Some may have never 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.
During the banking royal commission, Slater and Gordon also initiated a class action against NAB and MLC over its CCI policies on behalf of 50,000 customers. A $49.5 million settlement was reached in November 2019.
Slater and Gordon Class Actions senior associate Alex Blennerhassett said the settlements were without admission of any wrongdoing.
CBA will refund $50 million, ANZ will refund $47 million and Westpa will refund $29 million.
“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,” Blennerhassett said.
“Class actions are one way people can take on big corporations, including Australia’s Big Four banks.”
Bank customers eligible for a share in the settlements will be contacted by Slater and Gordon. They do not need to contact the firm.
Lead plaintiff in the CBA proceedings Kristy Fordham, from Queensland, was sold Loan Protection by the CBA without requesting it. At the time, she was a single mother of four children, was not working and had been diagnosed with serious health conditions, including chronic fatigue syndrome and fibromyalgia. This deemed her ineligible to claim the main benefits of the policy.
She was told by a bank employee that if she did not take out the policy - which cost $25 a month - there was no guarantee the loan would be approved.
At no stage was she advised that she was ineligible to make a claim. It was not until she was informed by the bank in late 2020 that she may have been paying for loan protection insurance that did not cover her that she discovered she was ineligible.
Fordham welcomed the settlement and said she was glad the legal fight was finally over.
“I believe the bank knew full well that we couldn’t benefit from their products, but they deliberately sold them to us anyway,” she said.
“We were all so vulnerable or else we wouldn’t have needed loans from them in the first place, yet they took advantage of that, in my opinion. It was behaviour that they made a lot of money from, so it’s about time those of us affected get compensated.”
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