Yahoo Finance Major banks offer Aussies 'life-changing' payouts over 'dodgy' practice: 'I got $111,000'
Commonwealth Bank, ANZ, NAB and Westpac sold millions of dollars in junk insurance to Aussies across the country.
Aussies could be sitting on individual goldmines after purchasing "dodgy" products from the big four banks decades ago. Claimo believes as many as one in three people in the country were sold insurance from Commonwealth Bank, ANZ, NAB and Westpac that they didn't really need.
While that might have been years ago, these people are now entitled to compensation. Karen Wright had unwittingly taken out three personal loans that came with junk insurance and she's received a refund of nearly $15,000.
“My mum’s wish was to travel the country, so my dad, my partner and my son are going to do just that with my dad, one of my sons and my partner,” she said.
RELATED
Aussies affected by this aren't just eligible for what they paid for the insurance, but also compensatory interest, which can see some payouts skyrocket.
Wright's payout included close to $9,000 in interest and she said the process of checking eligibility is "so easy".
"Getting some money back is so timely right now - it makes a nice change from the big banks taking our money," she added.
NSW resident Teena and her husband Troy knew something was wrong with their home loan when the balance wasn’t coming down.
Do you have a story? Email stew.perrie@yahooinc.com
“We tried to get out of the insurance, but it was so hard. Then we heard about Claimo, and they did the hard work for us,” she explained
The couple received a refund of $111,159.42, of which $66,567.97 were interest charges.
“It’s going straight on the mortgage and will mean we will have our home paid off in the next year or so instead of in the next 10 or 20, it’s life-changing," Teena said.
'Chances are' you have this junk insurance
Claimo director Nathan Mortlock said it's worth having a look to see if you're eligible because many don't realise they got caught up in the dodgy practice.
“If you took out a loan with a major bank in the early 2000s onwards – personal loans, home loans, credit cards, you name it - the likelihood is that you were duped into purchasing add-on insurance,” Mortlock explained.
“Most consumers weren’t told the loan insurance was optional. What happened was that the value of the insurance on the loan was bundled into the total amount of the loan, often at the time of signing, substantially increasing the payable interest, and resulting in the loans taking up to a third longer to pay off.
“The interest applied to the loan was often applied to the loan insurance, an unnecessary double whammy for consumers.”
The 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry made a ruling that banks and financial institutions can't sell insurance add-ons at the same time as purchasing a loan.
They now have to wait a few more days before getting you to sign up for anything else.
Are you eligible to claim slice of $8 million compensation?
Claimo estimates that Aussies have spent around $8 million in junk insurance with the big four banks.
Queensland had the biggest share of refunds in the past six months, with more than $873,000 paid out to those in the Sunshine State.
Victoria followed with $676,741 given back this year, followed by NSW with $532,796 and Western Australia had $495,836 repaid to residents.
Aussies have been encouraged to check their loan paperwork to see if it includes insurance, which is sometimes called consumer credit insurance or mortgage loan insurance.
“Alternatively, get in touch with our team and we’ll do the work for you using sophisticated financial calculation tools," Mortlock said. "If we don’t find anything you don’t pay anything, if we do, we will take a fee from the refund of 30 per cent."
Get the latest Yahoo Finance news - follow us on Facebook, LinkedIn and Instagram.
