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Life insurance rip off: 40,000 Aussies due $35 million refund

·2-min read
The exterior of an ANZ bank branch, a person holding $50 notes and a woman in a call centre wearing a headset
Customers of OnePath Life will be paid back for life insurance policies that were sold over the phone (Source: Getty)

OnePath Life (OnePath) will refund $35 million to over 40,000 customers who were sold life insurance policies over the phone between 2010 and 2016.

The corporate watchdog ASIC ordered OnePath to return the money to customers who were sold policies after finding they caused “extensive consumer harm”.

ASIC said OnePath used egregious sales practices to sell the life insurance policies, including:

  • pressure selling tactics (such as promoting a deferral of the first premium payment, and using the cooling off period as an inducement to buy the product).

  • failing to provide information about key policy exclusions.

  • leading the consumer to believe that the salesperson was calling from ANZ Bank with a special customer offer.

At the time of the sales calls, OnePath was owned by ANZ bank, but was operating as a separate business.

“For over three years now, ASIC has pursued enforcement, regulatory and remediation action to tackle misconduct and stem consumer harm in the direct life insurance market,” ASIC Deputy Chair Karen Chester said.

“ASIC has delivered deterrence through court action, disruption and improvement in sales practices and delivered compensation to tens of thousands of consumers who have suffered harm.”

Chester called for better industry practice and improved consumer outcomes after ASIC’s deep dive review of direct sales of life insurance in 2018.

“Notably, the deep dive review also informed the evidence base for several Hayne Royal Commission misconduct case studies,” she said.

“Our review uncovered egregious sales practices, with tens of thousands of consumers paying for products they did not want, did not need, or were not suitable for them.”

How to get your refund

Chester said if you believe you were the target of the dodgy sales practices to please get in touch with OnePath or ANZ.

She said there have been a number of cases where customers who are eligible for a refund have not banked their cheque.

“It’s really disappointing that despite OnePath offering refunds to around 26,000 consumers, less than one in two consumers (only 41 per cent) have banked their cheque or arranged with OnePath for their refund to be paid into their bank account,” Chester said.

“If you are a OnePath or ANZ insurance customer who has been contacted by OnePath about a refund, please respond to OnePath to arrange payment of your refund.”

You can also call OnePath on 1800 290 572 if you are unsure of what to do or want to check this is not a scam.

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