Aussies have until June to claim compensation—could you be eligible for up to $144,000?
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Unexpected windfalls can be life-changing, especially when they come from places you never thought to look.
In a quiet but significant development, thousands of Australians may be entitled to compensation for something tucked away in their financial past.
With a key deadline looming, the chance to claim what’s yours could soon be gone for good.
Australians were urged to check their financial records after the deadline to apply for a major compensation payout was extended.
The Australian Financial Complaints Authority (AFCA) moved the cut-off date from 4 February to 30 June, giving people extra time to see if they unknowingly paid for so-called ‘junk insurance’.
This type of insurance was often bundled into loans and credit cards without borrowers realising it was optional, increasing interest costs and potentially extending the loan's term by years.
Donna, a pensioner who had taken out a personal loan with NAB 17 years ago, thought her insurance was legitimate.
‘I was blown away,’ she shared.
‘The pension isn't much to live on and we're still paying our house off, so this has made things a bit easier.’
She used Claimo, one of the companies helping Australians uncover junk insurance payments, and ended up with an $11,000 refund.
Claimo reviewed her case over a few months and found she was entitled to compensation.
The practice of selling junk insurance was exposed during the Banking Royal Commission and has since been banned.
Nikola Araouzou, Claimo’s co-founder, explained how the scheme worked.
‘Banks were incentivised in commissions to sell these insurances without fully understanding what impact they could have on consumers,’ she said.
‘So we did see a lot of consumers who are unable to benefit from these policies being sold to them.’
AFCA’s lead ombudsman for insurance, Emma Curtis, warned that the extended deadline would be final.
‘It’s important that consumers know this deadline is fast approaching,’ she said.
AFCA advised that anyone who bought junk insurance before July 2019 should act immediately.
Some people discovered charges with names like ‘consumer credit insurance’, ‘mortgage protection insurance’ or ‘credit card insurance’ on their statements.
Araouzou urged people to contact their bank about any such fees.
She said the largest payout Claimo had seen so far was $144,000.
Victorian resident Karen Wright received nearly $15,000 after junk insurance was added to three separate loans taken out years ago.
‘When the payout happened, I couldn't believe it. That's quite a lot of money when you think about it,’ she shared.
‘I'm very happy with that extra little help that I've got because today is pretty tough living.’
NSW couple Teena and Troy were surprised when their mortgage balance barely moved despite regular repayments.
‘We tried to get out of the insurance, but it was so hard,’ Teena said.
They eventually secured a refund of $111,159.
‘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,’ she said.
People could investigate their own records or seek help from companies like Claimo, although Claimo took 30 per cent of any refund as their fee.
A poll of over 4,400 Yahoo Finance readers showed 60 per cent were unsure if they had ever signed up for junk insurance.
Donna encouraged others to double-check.
She said it was worth it—even if you didn’t remember signing up—as the results could be surprising.
In a previous story, we explored how a simple mistake with superannuation could end up costing you thousands.
If you’re concerned about your finances, it’s worth taking a look at this issue to ensure you’re not losing out.
Find out more about this costly blunder here.
With so many Australians unknowingly caught up in junk insurance, could you be missing out on a significant refund? Share your thoughts with us in the comments below!
In a quiet but significant development, thousands of Australians may be entitled to compensation for something tucked away in their financial past.
With a key deadline looming, the chance to claim what’s yours could soon be gone for good.
Australians were urged to check their financial records after the deadline to apply for a major compensation payout was extended.
The Australian Financial Complaints Authority (AFCA) moved the cut-off date from 4 February to 30 June, giving people extra time to see if they unknowingly paid for so-called ‘junk insurance’.
This type of insurance was often bundled into loans and credit cards without borrowers realising it was optional, increasing interest costs and potentially extending the loan's term by years.
Deadline extended for Aussies to claim junk insurance refunds. Image source: Pexels/RDNE Stock project
Donna, a pensioner who had taken out a personal loan with NAB 17 years ago, thought her insurance was legitimate.
‘I was blown away,’ she shared.
‘The pension isn't much to live on and we're still paying our house off, so this has made things a bit easier.’
She used Claimo, one of the companies helping Australians uncover junk insurance payments, and ended up with an $11,000 refund.
Claimo reviewed her case over a few months and found she was entitled to compensation.
The practice of selling junk insurance was exposed during the Banking Royal Commission and has since been banned.
Nikola Araouzou, Claimo’s co-founder, explained how the scheme worked.
‘Banks were incentivised in commissions to sell these insurances without fully understanding what impact they could have on consumers,’ she said.
‘So we did see a lot of consumers who are unable to benefit from these policies being sold to them.’
AFCA’s lead ombudsman for insurance, Emma Curtis, warned that the extended deadline would be final.
‘It’s important that consumers know this deadline is fast approaching,’ she said.
AFCA advised that anyone who bought junk insurance before July 2019 should act immediately.
Some people discovered charges with names like ‘consumer credit insurance’, ‘mortgage protection insurance’ or ‘credit card insurance’ on their statements.
Araouzou urged people to contact their bank about any such fees.
She said the largest payout Claimo had seen so far was $144,000.
Victorian resident Karen Wright received nearly $15,000 after junk insurance was added to three separate loans taken out years ago.
‘When the payout happened, I couldn't believe it. That's quite a lot of money when you think about it,’ she shared.
‘I'm very happy with that extra little help that I've got because today is pretty tough living.’
NSW couple Teena and Troy were surprised when their mortgage balance barely moved despite regular repayments.
‘We tried to get out of the insurance, but it was so hard,’ Teena said.
They eventually secured a refund of $111,159.
‘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,’ she said.
People could investigate their own records or seek help from companies like Claimo, although Claimo took 30 per cent of any refund as their fee.
A poll of over 4,400 Yahoo Finance readers showed 60 per cent were unsure if they had ever signed up for junk insurance.
Donna encouraged others to double-check.
She said it was worth it—even if you didn’t remember signing up—as the results could be surprising.
If you’re concerned about your finances, it’s worth taking a look at this issue to ensure you’re not losing out.
Find out more about this costly blunder here.
With so many Australians unknowingly caught up in junk insurance, could you be missing out on a significant refund? Share your thoughts with us in the comments below!
