Litigation firm Shine Lawyers has launched class action proceedings against the Commonwealth Bank of Australia (CBA) in the Federal Court of Australia.
The class action lawsuit has been filed on behalf of customers who obtained CommInsure life insurance products recommended by financial advisers operating under CBA subsidiaries Commonwealth Financial Planning Ltd (CFPL), Financial Wisdom Ltd (FWL) and BW Financial Advice (BWFA).
Shine Lawyers has alleged that these financial advisers, who “may have operated under other business names”:
- did not act in their clients’ best interests by failing to inform their clients that they could obtain substantially similar or better insurance policies from alternative insurers for lower premiums
- were incentivised through commissions and other financial and non-financial benefits to recommend insurance through CBA’s related party CommInsure Ltd, resulting in their clients paying unfairly higher premiums.
“We allege the Commonwealth Bank’s licensed financial planners failed to inform their clients they could obtain substantially similar or better insurance policies with lower premiums from alternative insurers,” Shine Lawyers’ class actions practice leader Craig Allsopp said.
“Instead of putting their clients’ best interests first, the planners were incentivised by commissions and other benefits to funnel people into expensive CommInsure policies.
“Customers trusted their advisors to make the best decisions for them but they were let down and – in some cases – have lost thousands of dollars.”
Accordingly, the law firm is calling for customers to be compensated for the “excess premiums” they paid as a result of “unethical financial advice and conduct”.
Mr Allsopp added that if the class action is successful, the compensation amount received by impacted customers would depend on the premiums they paid for their insurance for the period they held the policy.
“It is far too difficult and expensive to launch individual legal claims against big corporations with deep pockets so this case gives people a fighting chance to claw back the money they’re owed with the strength in numbers afforded to them by a class action,” Mr Allsopp said.
In an update to shareholders, CBA acknowledged the class action, adding that CFPL and FWL will be “reviewing the claim”.
This is the latest of a number of class actions filed by Shine Lawyers against major institutions with financial advice subsidiaries, including AMP and Westpac.
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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.