Slater and Gordon have filed a class action against the Commonwealth Bank of Australia (CBA), after allegations the bank sold customers junk insurance between 1 January, 2010, and 7 March, 2018.
The class action was filed in the Federal Court and the proceedings had also been brought against The Colonial Mutual Life Assurance Society Limited.
In an announcement, Slater and Gordon said the bank had admitted the products were “worthless” and were sold to hundreds of thousands of customers.
While the products were continued to be sold until March 2018, existing polities had simply been rolled over and many customers were “continuing to be charged thousands of dollars in fees for the worthless products to this day”, the law firm said.
Slater and Gordon practice group leader, Andrew Paull said the class action gave 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.
“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,” Paull said.
“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.”
The firm said 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.
In an announcement to the Australian Securities Exchange (ASX) CBA acknowledged the class action and said it would review the claim.