Bannister Law is investigating a potential class action against the Commonwealth Bank of Australia (CBA) concerning the sale of consumer credit insurance (CCI) made by CBA’s Retail Banking Services.
CCI is insurance that covers a person if they are unable to meet their credit card or loan repayments, due to death, disability, illness or certain types of unemployment. It is commonly known as credit, loan or mortgage protection insurance.
On 8 December 2017, ASIC wrote to distributors of CCI products, including the CBA, requesting that an independent review be undertaken.
ASIC detailed a number of concerns around the sale of CCI products to be reviewed including these concerns:
- customers were unlikely to benefit from their CCI cover;
- customers were being overcharged CCI premiums;
- CCI cover was not being considered when a customer applied for financial hardship assistance; and
- CCI was being sold to customers under the age of 25 with no dependants.
On 7 February 2018 Ernst and Young was engaged by CBA to conduct an independent review into CBA’s sale of CCI in the period 1 January 2013 to 8 December 2017.
That review uncovered that:
- 147,451 customers were identified as having been sold by CBA a CCI product in circumstances where they were under the age of 25 with no dependants; and
- 227,845 customers were at a ‘high-risk’ of being affected by one of ASIC’s Concerns.
We are seeking to identify consumers who have purchased CCI from CBA from 1 January 2013 to 8 December 2017.
CCI insurance purchased from CBA may have been ‘poor value products’, ‘mis-sold’ to consumers and not met standards set by CBA. Pricing structures for some of these products may not have been understood by all customers.
In our view, these practices may constitute unconscionable conduct and could amount to a breach of section 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).
If you are interested, please register your details below for a potential class action against CBA to recover compensation for financial losses suffered.