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Millions of Aussies owed $1.6 billion refund

Australian money and wallet
Millions of Aussies are owed refunds from the financial sector. (Source: Getty)

Millions of Aussies have been ripped off by ‘junk insurance’ and other dodgy charges from the financial sector.

The Australian Securities and Investments Commission (ASIC) estimates 2.7 million Aussies are still owed refunds to the tune of $1.6 billion.

ASIC said remediation was available to people who received fees for no service or non-compliant advice, as well as for people who bought ‘junk insurance’.

Junk insurance refers to insurance that is “essentially useless”, according to the Consumer Action Law Centre.

It’s often sold as an add-on on products like credit cards, personal loans and home loans.

Common examples include Consumer Credit Insurance (CCI) and GAP insurance.

ASIC has released guidance for financial services to help them quickly refund customers.

“Our guidance puts the onus on industry to get on with fair and timely remediations – returning the money they owe to wronged consumers,” ASIC deputy chair Karen Chester said.

“To date, ASIC has needed to oversee large-scale remediations to ensure affected consumers were treated fairly and received the compensation they were entitled to.”

Chester called on the financial services industry to “do better” at finding and remediating problems earlier.

Aussies should look out for any communication from their bank or other financial services provider regarding remediation.

Aussies owed $2,000 for junk insurance

Recent data from consumer-remediation service Remediator, found one in four Aussies had been sold junk insurance.

According to the company, the average refund amount was $1,962.76 but claims could be as high as $41,499.

There are also class actions being brought against three of the big four banks.

Slater and Gordon is currently leading class actions against Commonwealth Bank, ANZ and Westpac over the sale of junk insurance for credit cards and personal loans.

In 2020, the law firm settled a $49.5 million class action against NAB over the sale of junk insurance.

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