Law firm Slater & Gordon (ASX: SGH) has filed its fourth class action in the #GetYourInsuranceBack campaign, this time accusing Commonwealth Bank (ASX: CBA) of allegedly selling junk credit card and personal loan insurance to customers.
S&G's class action filed in the Federal Court means it has now taken aim at all the Big Four banks over this issue.
The firm reached a $49.5 million settlement with National Australia Bank (ASX: NAB) in November over the sale of "worthless" credit card insurance (CCI), while in February this year it filed two class actions against ANZ (ASX: ANZ) and Westpac (ASX: WBC) for credit insurance that allegedly provided little or no benefit and in some cases was allegedly charged without consent.
The Commonwealth Bank has admitted its products in question were worthless, even though they were sold to hundreds of thousands of their customers.
During the Royal Commission it was revealed the bank's former group executive for retail banking services Matt Comyn, who is now CEO, had pushed for the bank to stop selling the junk insurance in 2015.
Comyn told the commission he had however been allegedly told by then CEO Ian Narev to "temper [his] sense of justice", and the products continued to be sold until March 2018, just before Comyn took on the top job.
Despite the discontinuation of sales of these products, Slater & Gordon notes existing policies had simply been rolled over and many customers are still being charged thousands of dollars in fees for the "worthless" products to this day.
The firm's practice group leader Andrew Paull says the class action gives a voice to those who were vulnerable and duped into buying "worthless" insurance. It would allow those customers to hold the bank to account for its wrongdoing.
Paull hopes the class action will help the customers get their money back, while keeping corporate giants honest.
"A 2018 review of the Commonwealth Bank's sale of consumer credit insurance products revealed that more than 200,000 people who were unemployed or not working full time had been sold this type of policy, meaning it was very unlikely they would have been able to claim against the insurance," he says.
"This is reprehensible behaviour by the bank, which has chosen to compensate only a negligible portion of its customers, despite their admission that they knew the insurance was worthless.
"This move to return only a small portion of its customers premiums seems to have been a tokenistic effort to protect the bank's brand, rather than a genuine attempt to make good its past wrongdoing."
He says Slater & Gordon is still being contacted by large numbers of Commonwealth Bank customers who should never have been sold the products, yet have never been remediated.
He calls on the Commonwealth Bank to properly address the claims brought in this class action by ensuring all aggrieved customers are compensated.
Consumers who purchased either Credit Card Plus, or Personal Loan Insurance and have paid a premium since 2010 may be included in the class action.
CBA has acknowledged the proceedings have been brought against it as well as The Colonial Mutual Life Assurance Society Limited (CMLA).
"CBA is reviewing the claim and will provide any update as required," the bank said.
The law firm also has a class action against CBA subsidiary Colonial First State (CFS), which is due to be sold to global investment firm KKR for $1.7 billion.
S&G, which is running the case alongside parallel class actions launched by Maurice Blackburn and Shine Lawyers, claims half a million Australians were allegedly charged excessive superannuation fees to fund ongoing commissions paid by Colonial First State to financial advisers.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support