After launching proceedings against ANZ and Westpac in November, law firm Slater and Gordon has announced that it has formally filed class actions against the banks in the Federal Court.
The class actions relate to consumer credit insurance (CCI) added to credit cards and personal loans issued by ANZ and Westpac.
According to Slater and Gordon, the class actions are based on claims of:
- unconscionable conduct;
- inappropriate advice;
- misleading or deceptive conduct; and
- unjust enrichment.
Slater and Gordan has alleged that the insurance policies provided “little or no benefit to the banks’ customers” but generated “hundreds of millions of dollars in revenue” for the banks and insurers.
Further, it is alleged that the insurance products were added to customers’ loans and credit cards “without customers’ consent” or “without customers being told it was optional”.
Both class actions have been filed in the Federal Court and are set to be served to the banks on Friday.
Following the announcement, Slater and Gordon practice group leader Andrew Paull claimed that the firm aims at holding the banks to account for such sales practices, which he noted has since been banned by the Australian Securities and Investments Commission (ASIC).
“For too long, banks have abused 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,” he said.
“Both banks stopped selling this junk insurance last year and ASIC has now outright banned the practice of cold calling potential customers.
“These are welcome developments, but not enough has been done to compensate the past victims of these predatory sales tactics.
“The customers we’ve spoken with trusted the big banks. They were ripped off and continue to be out of pocket after being pressured to sign up to worthless insurance cover.
“Many people who were sold the insurance had disabilities, were unemployed, or were critically ill, and therefore not eligible to claim on the policies.
“Others were led to believe the insurance they bought was free, or mandatory. Neither was the case.”
Mr Paull said that the banks enjoyed “extraordinary profit margins” on the products, claiming that in 2011 and 2018, ANZ paid out claims totalling 6.9 cents for every dollar collected in credit card insurance premiums.
“In comparison, motor vehicle insurance pays out approximately 85 cents for every dollar of premiums,” he said.
According to the firm, anyone who purchased ANZ Credit Card Insurance, ANZ Personal Loan Protection, Westpac Credit Card Repayment Protection, Westpac Flexi Loan Repayment Protection or Westpac Personal Loan Protection since 2010 may be included in the class action.
Slater and Gordon has stated that both class actions would be run “no win, no fee” and without a litigation funder.
This comes just months after the firm reached a settlement with NAB for $49.5 million, also relating to the sale of CCI products.
More to come
[Related: NAB agrees to pay $49.5m in CCI settlements]
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.