As many as 1 in 4 Australian adults could be eligible for a refund on ‘Junk Insurance’ premiums they’ve paid on credit cards and loans over the past 7 years.
An investigation by consumer expert Joel Gibson and Australia’s newest consumer remediation service, Remediator, has found that:
● Around 5.6 million ‘add-on insurance’ policies were sold from 2014-2020,
● ASIC is aware of at least $5.23 billion in remediations to millions of consumers for dodgy insurance and other charges,
● By April 2021, 580,000 Australians had already been repaid over $250 million just for dodgy sales of one insurance type - Consumer Credit Insurance (CCI).
Joel Gibson says: “The sheer number of policies sold means the full scope of this scandal remains unknown. There could be millions more who are owed refunds and may not be aware of it. They may not even be aware they were paying for it!”
“Junk Insurance” is an umbrella term used to describe a range of ‘add-on’ insurance policies that banks and insurance companies sometimes add to credit cards and loans.
It’s not cheap - some policies cost over $2000 a year - but it’s poor value: for every dollar credit card customers paid in CCI premiums, they got just 11c back in claims.
Many policies were “mis-sold” using high pressure tactics and some were sold to customers who already had cover elsewhere, or were not eligible to claim.
The clue to whether you’ve paid for Junk Insurance could be in your old credit card or loan statements, which institutions are obliged to provide to you.
Consumers who don’t want to do the leg work themselves can use a service such as Remediator, launched last year, which is now claiming thousands in refunds each week.
Examples include Tracey from Sydney ($4,951 CCI refund), Vena from Brisbane ($6,912 CCI refund), and Michael from South Sydney ($2,691 loan protection insurance refund).
Remediator helps Australians claim refunds from their bank, insurer or financial adviser if they have been mis-sold products/services, or paid for goods/services they did not receive.
Remediator works on a no-win-no-fee basis: if Remediator can’t secure a refund, there’s no fee. If successful, Remediator’s fee is 20% plus GST of the refund amount.
 General Insurance Code Governance Committee: General Insurance in Australia Annual Reports 2015-2020