Australia Markets open in 2 hrs 38 mins

400,000 Aussies could get money from NAB after insurance rip-off

Image: Getty

Nearly half a million Australians could be eligible for compensation from NAB if a class action against the bank succeeds.

The 400,000 affected Australians will today receive letters from the Federal Court advising them of the consumer credit class action which alleges that customers were sold junk credit card and personal loan insurance of little or no value.

The legal action, brought forward by Slater and Gordon, was triggered by the Banking Royal Commission in 2018. The legal firm claims the sale of insurance products customers would have been unable to claim against amounts to misleading and deceptive conduct.

“NAB will have to contact over 400,000 of the customers on their databases today, informing them that this class action exists, that the bank is accused of contravening the law and telling them what they have to do to be involved,” practice group leader Andrew Paull said.

“If you are – or have been – a NAB customer in the past, keep an eye out for this letter which will advise you of how to register your interest in participating in the class action.”

Recipients also have the option to opt out of the class action, which is being run on a ‘no win, no fee’ basis.

NAB Federal Court email is not a scam

However, some recipients of the letter are concerned it’s a scam.

“It’s a scam looking at that email,” one member of Facebook group Mums Who Budget and Save commented on a picture of the Federal Court of Australia notice.

“Don't click on anything and contact the court to check whether they sent it. It's probably a scam,” added another.

“I got it and deleted it straight away,” said another.

ASIC slams banks for offering consumer credit insurance

A report from the Australian Securities and Investments Commission (ASIC) in July criticised Australia’s major banks for selling junk consumer credit insurance products, describing it as a product that has “consistently failed consumers”.

The report said the product which can be added on when a borrower gets a credit card or loan was often mis-sold and offered “extremely poor value for money”.

“We are deeply troubled by the findings in our report, and the stories they tell of unfair practices occurring within Australia's largest and most well-known financial institutions,” ASIC Commissioner Sean Hughes said at the time.

“Lenders and insurers have had more than enough time to improve sales practices and provide better value for consumers. An inevitable consequence of these widespread failings and mis-selling practices will involve ASIC taking significant enforcement action against some of the entities named in our report.”

Yahoo Finance All Markets Summit

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.