Slater and Gordon has launched two new class actions against ANZ and Westpac for the alleged mis-selling of consumer credit insurance (CCI) products to potentially hundreds of thousands of customers.
This comes just days after the firm reached a settlement with NAB for $49.5 million, also relating to the sale of CCI products.
According to the law firm, the products in question in its latest class action include:
- ANZ Credit Cover
- ANZ Credit Cover Plus
- ANZ Loan Protection
- Westpac Credit Card Repayment Protection
Slater and Gordon pointed to findings from the Australian Securities and Investments Commission (ASIC), which found that insurers, including ANZ and Westpac, have collected over $1.78 billion in premiums on CCI products over the last eight years, while returning only 11 per cent of that amount back to consumers in claims made on the policies.
Following the announcement, Slater and Gordon practice group leader Andrew Paull commented: “Banks have been abusing their power by selling junk insurance products, adding thousands to their customers’ credit card bills or personal loan repayments while providing little or no benefits to the customer.
“Customers who trusted the big banks were ripped off and continue to be out of pocket after being pressured to sign up to worthless insurance cover.”
According to Mr Paull, many of the firm’s clients who purchased the insurance products had disabilities, were unemployed, or were critically ill, which he said made them ineligible to claim against the insurance products.
“Others were simply led to believe the insurance they bought was free, or mandatory. Neither was the case,” he added.
“The behaviour uncovered by the royal commission, whereby big multimillion-dollar financial institutions were taking advantage of vulnerable Australians for financial gain was reprehensible.
“We will continue to hold the big banks to account on behalf of the hundreds of thousands of Australians who have been ripped off. They deserve to get their money back.”
Both ANZ and Westpac have acknowledged the law firm’s announcement but noted that they are yet to be served with a statement of claim from Slater and Gordon.
Westpac board ‘unreservedly apologises’
The announcement also comes days after Australia’s anti-money laundering and terrorism financing regulator, AUSTRAC, applied to the Federal Court for civil penalty orders against Westpac.
According to AUSTRAC, the civil penalty orders relate to “systemic non-compliance” with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
AUSTRAC alleged that Westpac contravened the act on over 23 million occasions, some of which occurred in 2019.
Westpac CEO Brian Hartzer apologised for the bank’s shortcomings, adding that he would “personally lead” the bank’s response to the investigation.
The board has also issued an apology, with chairman Lindsay Maxsted, stating that the board is “devastated” by the issues raised by AUSTRAC.
“The notion that any child has been hurt as a result of any failings by Westpac is deeply distressing, and we are truly sorry. The board unreservedly apologises,” he said.
“Our board, CEO and management team are fully committed to fixing these issues, and we are taking all steps necessary to urgently close any remaining gaps and fix our policies and procedures so that this can never happen again.”
Mr Maxsted added that Westpac is reviewing and taking action on all of the individual customers mentioned by AUSTRAC and establishing a multi-layered review.
“This review includes accelerating our ongoing program of AML/CTF improvements, and we will provide public updates on our progress,” he said.
“In addition, we will appoint independent experts to oversee the program, including a review of accountability.
“We will take actions emerging from that review. An assessment of suitably qualified candidates to lead that review is underway.
The chairman said the bank has also commenced discussions with relevant community groups about any further steps it can take to fight child exploitation.
“We are continuing to work closely with AUSTRAC to accelerate resolution of the matter,” he said.
“The board will provide an update in coming days to share more information on what has occurred and what steps we are taking.”
If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.
Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.