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Junk Insurance Class Actions: All You Need To Know

Joel Gibson, Consumer Expert

Featured in A Current Affairs, The Daily Telegraph, The Advertiser, Herald, The Courier Mail

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What is junk insurance?

 

"Junk Insurance” is a term used to describe a range of insurance policies that banks and insurance companies have added to millions of credit cards and loans.

 

The official term is “add-on insurance” but they’ve become known as “Junk” for a range of reasons: They might have signed you up without your proper consent; They might have signed you up using dodgy sales tactics; or it might be entirely worthless to you.

 

There’s more here in our Junk Insurance Refund Guide.

 

The 3 Ways to Claim Your Junk Insurance Refund

If you want a refund on Junk Insurance premiums in Australia, you’ve got three options:

 

1. DIY: Contact the bank yourself and ask them for copies of your old statements,

2. Class action: Seek a refund via one of many class actions, or

3. Remediation services: Ask a service such as Remediator to try and get you the maximum refund in the minimum time.

 

The bad news? Many of us didn’t even know we were paying for it in the first place, so chances are we STILL don’t know we’ve paid for it - let alone how to reclaim it.

 

So billions of dollars of our hard-earned money could be sitting in bank and insurance company coffers, unclaimed.

 

Remediator was created to help you find out whether you’re one of millions of Aussies who are owed refunds for Junk Insurance premiums and to help you get it back.

Get your FREE eligibility check here or call now on 1800 984 707

 

how do class actions work in Australia?

Class actions in Australia use an ‘opt-out’ model, which means you might automatically be joined up to one or more of them already.

 

But even if you’re part of the group, you have the right to ‘opt out’ and seek your MAXIMUM refund in the MINIMUM timeframe.

 

There are dozens of class actions against Aussie banks and insurance companies that sold dodgy ‘junk insurance’ over the past 10-15 years, including:

  • CBA class action - currently ongoing

  • Westpac class action - currently ongoing

  • ANZ class action - currently ongoing

  • NAB class action - settled for $49.5 million

  • MTA insurance class action - currently ongoing

  • Swann insurance class action - settled for $138 million)

  • QBE insurance class action (ongoing)

 

If you’re part of a class action, you should have received an ‘Opt Out and Commencement Notice’ informing you that you were part of the class action.

 

You can then decide whether you opt to remain in the class action, or pursue a bigger, faster refund by yourself or using a service such as Remediator.

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HOW TO MAXIMISE YOUR REFUND?

 

The most important thing is that you do something to get your money back - whether you take on the bank yourself, or ask a law firm or remediation service to help.

 

But here’s what you need to know to decide which way to go about it.

DYI:

If you decide to do it yourself, you’ll need to comb over your old statements for evidence of insurance premiums being deducted.

 

You can request these statements by contacting your current and former financial institutions.

 

The insurance products have names such as ‘consumer credit insurance’ and ‘guaranteed asset protection insurance’, but many banks and insurance companies ‘re-branded’ them with their own names, which can make them tricky to spot.

Some of us will feel confident to DIY. But DIY can also be time consuming and difficult, so if you want some more firepower in your corner, consider asking the experts to take up your fight for you.

CLASS ACTION:

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If you do nothing, you might be taking this option by default.

In Australia, the plaintiff in a class action does not require the consent of class members to commence a class action on their behalf, nor do they need to identify individual class members.

 

This is known as an ‘open’ class action system and is different to the system in other countries with a ‘closed’ system which requires class members to actively ‘sign up’.

 

If you’re part of the class action, you’ll be bound by the result and you lose your ability to claim direct from the bank or via services such as Remediator.‘

 

Opting out’ can sometimes result in a bigger, quicker refund, but you generally need to do it before the deadline.

 

Many Class Actions are run on a no win, no fee basis and sometimes with a litigation funder. That means that if successful, the court will probably approve for the law firm and the funder to deduct reasonable legal costs from any settlement or judgement obtained.

 

But legal fees and the fees paid to litigation funders on class actions can sometimes really add up. A recent Parliamentary Enquiry concluded that:

“When they finally get their day in court, it is the genuinely wronged class action members who are getting the raw deal of significantly diminished compensation for their loss, as bigger and bigger cuts are awarded to generously paid lawyers and funders.”

An academic submission to the same enquiry found that  over the past 20 years, legal fees plus litigation funding fees on class actions added up to on average approximately  40%.

Opting out usually requires a prescribed form to be completed and lodged within a set period of time. This can vary between class actions and jurisdictions. Before opting out, the class member should check they can prove the elements of their claim and that the claim is still ‘within time’.

In some cases, we’ve found they will allow you to opt out AFTER the closing date. So even if you think it’s too late, Remediator can make enquiries for you.

morrissey law & advisory says:

“It is usually more convenient for a class member to have its claim dealt with by the Court alongside other class members who have been affected by the same circumstances.”

 

“That convenience should be weighed against the time that that it usually takes to resolve a class action, which can be slow‐moving, and sometimes not reach settlement or determination for several years.”

 

“Considerations should include:

  • The scale of class actions - class members may be unlikely to receive more than ‘cents on the dollar’ for their claim.

  • Loss of control over a class member’s own claim - particularly if litigation funders are involved and are responsible for instructing the class’ legal representation.”

CLICK HERE to read Morrissey Law & Advisory’s full guide to class actions.

REMEDIATION SERVICES:

We believe services such as Remediator are the ideal compromise for anyone who wants to maximise their refund without doing all the work themselves.

If you’re already joined to a Class Action: we can inquire whether it’s possible for you to opt out, even if the deadline has passed.

 

If you’re not joined to a Class Action: you’re free to use Remediator to try and maximise your refund.

With services such as Remediator, you know what percentage of the refund you’re getting back and you can be confident we will try to maximise your refund and minimise the waiting time.

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Some remediation services charge 30% of your refund for the work they do. Remediator only charges 20% while doing all the legwork for you, from contacting your bank to combing through your old statements to chasing up your refund and fighting your corner if the going gets tough. If there’s no refund, there’s no fee.

 

But the proof is in the pudding: decide for yourself!

Average Remediator refund so far: $2,179

Average time from eligibility check to refund: 38 days

This article does not provide legal or financial advice. Any information in this article is designed to provide information to consumers who want to learn more about class actions and other ways to seek refunds. All information is general in nature.

ClaimFast Pty Ltd trading as Remediator is not liable for any loss caused, whether due to negligence or otherwise arising from use of, or reliance on, the information provided directly or indirectly, by use of this service.  Consider whether the service is right for you. If you are unsure how to proceed, you should seek independent legal advice.