Money, What's New
Published on August 29, 2017 2:38 am, by Pete Lalor
Commonwealth Bank has agreed to refund $10m to 65,000 customers after selling them unsuitable insurance.
Creditcard Plus Insurance is supposed to help customers repay their credit card balance in the event they become sick or unemployed. Between 2011 and 2015 it was sold to people who were students or who were already unemployed and would therefore not be able to claim under the disability cover provided by the insurance.
The bank is also refunding $586,000 to about 10,000 customers who were sold Home Loan Protection insurance that provided more cover than they needed – and of course resulted in customers paying higher premiums than they needed to.
These types of insurance products are known as “add-on insurance” because they are sold with another financial product. In many cases they are expensive and provide questionable cover for customers.
You can read more about these types of insurance products in this scathing Choice report from May 2016.
ASIC is continuing to examine the practices of financial institutions and other business involved in selling add-on insurance products.
This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711, ACL 493068). The information in this summary is of a factual nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice you should seek advice from a licensed financial adviser
Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.