Aussies reclaim as much $90,000 for 'junk insurance'—are you eligible too?
- Replies 11
Insurance policies are ideally safety nets, designed to catch us when we tumble into unforeseen circumstances.
But what if those very nets were cast not for our safety, but rather to ensnare us in a costly web?
This is the feeling of many Australians who have been unknowingly burdened with 'junk insurance'—and they're now fighting back, managing to reclaim as much as $90,000!
Junk insurance often sneaks its way onto contracts when Australians apply for credit cards, car loans, or home loans. With the allure of essential protection, these policies might seem sensible, but for some, they have been anything but necessary.
Tony Herrmann's story is a cautionary tale.
Upon reviewing his financial commitments, Herrmann spotted an odd detail on his car loan.
'I was paying two insurances for the one item,' he shared.
He also realised that he had been similarly deceived across various personal loans and credit cards.
His losses tallied to a staggering $8,500.
'It's disgusting people are putting those insurances on.'
Yet, Tony is far from unique in his predicament.
Dave Collier, a retired police officer, was in for a remarkable revelation when he delved into his financials.
He found he was owed more than $17,000 due to consumer credit insurance tagged onto his home loan.
'I thought “If I get $1000 back, this is a bonus,” having no idea what I had paid out over the years,' he said.
It was for consumer credit insurance, which shields lenders from defaults on loans in the event of illness, unemployment, or accidents.
Dave was pitched this product every time he refinanced his home, but he was already covered by income protection insurance from his job, so he didn't need it.
'Effectively, you're painted into a corner of having to take the insurance out. Otherwise, the loan wouldn't be approved.'
The duo joined the ranks of consumers who sought the services of claims management companies like Claimo, which operate on a 'no win, no fee' basis, taking a portion (30 per cent) of client refunds.
Nathan Mortlock from Claimo underscored that banks aren't forthcoming about such oversights.
He also shared that they’re getting some Australians up to $90,000 in refunds.
'The bank's not going to call you to say they owe you some money, you have to do something about it,' he said.
For the proactive and the thorough, fortunes might await in reviewing loan contracts or bank statements for terms like 'credit card insurance' or 'loan protection'.
Mortlock also added that more than 6 million Australians may have been affected by these schemes.
According to Australian Securities and Investments Commission data released in September 2022, an estimated $1.6 billion is yet to be paid to about 2.7 million consumers for remediation for both junk insurance and fees for non-compliant advice.
The good news is that there are avenues for seeking that refund.
Customers can complain to the Australian Financial Complaints Authority to start the refund process after speaking with their lenders.
If customers are unhappy with their lender's response after 30 days, they can visit the AFCA website to lodge a complaint.
What are your thoughts on this latest news, dear members? Have you, or anyone you know, received a refund for their 'junk insurance'? Share your thoughts and stories with us in the comments below!
But what if those very nets were cast not for our safety, but rather to ensnare us in a costly web?
This is the feeling of many Australians who have been unknowingly burdened with 'junk insurance'—and they're now fighting back, managing to reclaim as much as $90,000!
Junk insurance often sneaks its way onto contracts when Australians apply for credit cards, car loans, or home loans. With the allure of essential protection, these policies might seem sensible, but for some, they have been anything but necessary.
Tony Herrmann's story is a cautionary tale.
Upon reviewing his financial commitments, Herrmann spotted an odd detail on his car loan.
'I was paying two insurances for the one item,' he shared.
Australians are being refunded as much as $90,000 for 'junk insurance'. Image source: tirachardz on Freepik.
He also realised that he had been similarly deceived across various personal loans and credit cards.
His losses tallied to a staggering $8,500.
'It's disgusting people are putting those insurances on.'
Yet, Tony is far from unique in his predicament.
Dave Collier, a retired police officer, was in for a remarkable revelation when he delved into his financials.
He found he was owed more than $17,000 due to consumer credit insurance tagged onto his home loan.
'I thought “If I get $1000 back, this is a bonus,” having no idea what I had paid out over the years,' he said.
It was for consumer credit insurance, which shields lenders from defaults on loans in the event of illness, unemployment, or accidents.
Dave was pitched this product every time he refinanced his home, but he was already covered by income protection insurance from his job, so he didn't need it.
'Effectively, you're painted into a corner of having to take the insurance out. Otherwise, the loan wouldn't be approved.'
The duo joined the ranks of consumers who sought the services of claims management companies like Claimo, which operate on a 'no win, no fee' basis, taking a portion (30 per cent) of client refunds.
Nathan Mortlock from Claimo underscored that banks aren't forthcoming about such oversights.
He also shared that they’re getting some Australians up to $90,000 in refunds.
'The bank's not going to call you to say they owe you some money, you have to do something about it,' he said.
For the proactive and the thorough, fortunes might await in reviewing loan contracts or bank statements for terms like 'credit card insurance' or 'loan protection'.
Mortlock also added that more than 6 million Australians may have been affected by these schemes.
According to Australian Securities and Investments Commission data released in September 2022, an estimated $1.6 billion is yet to be paid to about 2.7 million consumers for remediation for both junk insurance and fees for non-compliant advice.
The good news is that there are avenues for seeking that refund.
Customers can complain to the Australian Financial Complaints Authority to start the refund process after speaking with their lenders.
If customers are unhappy with their lender's response after 30 days, they can visit the AFCA website to lodge a complaint.
.png){kind=icon}
