| | | |

Eight million Aussies could qualify for loan insurance refunds.

Up to one in three Australians, including potentially one million first responders and other public sector workers, might be able to claim back their share of an estimated $3.4 billion in illegitimate insurance fees on loans.

Research from consumer advocate Claimo has found up to one in three Australians may have been sold Consumer Credit Insurance (CCI) policies over the years, which drew the ire of ASIC in 2019.

The ASIC report found CCI was often sold to customers ineligible to claim or unlikely to benefit, with sales staff frequently using unfair sales practices and giving non compliant personal advice.

Data compiled by consumer advocate group Claimo has revealed Aussies have paid around $3.4 billion for unnecessary loan insurance add-ons and people could claw back tens of thousands of dollars, which could go a long way in this cost-of-living crisis.

ASIC implemented a remediation program that has already seen more than 500,000 customers receive refunds, but Claimo Director and Founder Nathan Morlock says their research suggests a far bigger scale.

“The data suggests literally one in three Aussies might have been sold [consumer credit] insurance,” he told Savings.com.au.

He said these policies were often sold on novated leases, with front line responders like nurses and police officers as well as other government staff seemingly particularly affected.

A novated lease is a salary sacrifice arrangement where employers make payments towards a vehicle lease out of a employees pre-tax salary, which reduces taxable income.

Mr Morlock says Claimo have dealt with many government workers who unknowingly had these tax benefits negated through CCI charges.

“Because frontline workers are eligible for these tax benefits, they sign up, but what they don’t necessarily know about are extra hidden charges for insurance policies,” he told Savings.com.au.

“Lease protection, guaranteed asset protection, guaranteed buyback insurance, these are the types of policies added on when they didn’t know about it or necessarily need it.

“People who are predominantly affected includes the service staff…for example, there’s a whole community of Ambos in Victoria who are using our service.”

In one case, an ex police officer claimed a refund of nearly $20,000 for CCI premiums on a home loan.

How to check if you’re owed money?

The first stage of the process would be to check your loan or credit card documentation. Don’t worry if you no longer have your documents, Claimo will request these for you.

We will send an information request to your banks and financial institutions to see if you have been charged for add-on or junk insurance.

If you have been charged for junk insurance, one of Claimo’s claims specialists will give you a call to discuss your eligibility. When financial firms confirm that you have not been charged for the insurance, we will close that part of your enquiry. We don’t charge if you do not have insurance. 

Claimo will then submit a claim on your behalf and manage the process for you from start to finish. On average, the claims process can take around 12 weeks once your claim has been submitted. 

Our junk insurance claims managers will give you regular updates as they come. For more information about junk insurance, please read our full junk insurance guide here. 



Similar Posts