On Thursday (15 September), The Adviser reported that Shine Lawyers had launched a class action investigation on behalf of borrowers who were sold personal risk protection insurance by Aussie Home Loans.
The personal risk protection insurance, which is also sold via many major broker groups, is provided by ALI Group.
Responding to the class action claims, ALI CEO Huy Truong said the allegations about the worth of the policies are baseless.
“Both Aussie and ALI Group are considering our options in relation to these allegations,” he said.
“To date, $147.8m have been paid to policy holders who have suffered from loss of employment, accidents, serious illness or worse. Many of these claimants have subsequently shares heartfelt gratitude to ALI and the mortgage broker who offered the policy. We expect to pay many more claims in the future as life events continue to impact our policy holders.”
An Aussie spokesperson said the group is aware of recent media reports regarding aspects of an ALI insurance product.
"While our Aussie brokers assist thousands of customers to understand their home loan journey through an approved panel of lenders, we do not sell insurance ourselves," the brokerage said. "Aussie have not received any legal correspondence relating to these particular claims."
Commenting on the class action investigation by Shine Lawyers, FBAA managing director Peter White said: “This looks to me like an early digging exercise. To me it reads like a call to action, rather than any firm case. Sometimes there are opportunistic businesses looking for a cause when there is no cause there at all. However, we will have to wait for the investigations to be completed.”
ALI Group told The Adviser that it has protected over 225,000 customers to date through its authorised mortgage brokers. During that time, only 42 policyholders (0.02 per cent) made a complaint to the Australian Financial Complaints Authority (AFCA). Of those 42 complaints, 40 were found in ALI’s favour, the group said.
“This data reinforces how much ALI cares about the quality of experience we provide to our broker partners and policy holders,” CEO Mr Truong said.
Independent research of ALI customers found that 98 per cent of customers felt it was reasonable for the broker to offer MPP to them within the context of a home loan.
“I am very disappointed that such fundamentally inaccurate and unfounded allegations receive such media coverage as it causes unnecessary concern with consumers and our broker partners,” Mr Truong said.
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