The Australian Securities and Investments Commission has also targeted unwanted consumer credit insurance in a series of reports and then regulatory action, resulting in the payment of an additional $270 million in reparations across the sector. .
ASIC has filed a lawsuit against Westpac over certain ICC policies, with the Federal Court issuing findings against the bank earlier this year.
roofer & Gordon settled a similar case against National Australia Bank in 2019 for $49.5 million. The one related to NAB and MLC fonts sold to 50,000 customers.
The final number of customers holding questionable policies at the other three banks is not known but is expected to be in the hundreds of thousands, according to court documents.
The ABC said Monday it had agreed to pay $50 million to settle the case. ANZ said it would contribute $42 million to the settlement; roofer & Gordon said ANZ and its related entities would pay $47 million. Westpac, meanwhile, will pay $29 million.
This brings the total compensation in the three cases to $126 million and $176 million when the NAB settlement is included.
roofer & Gordon filed the class actions in “no gain, no cost” arrangements without litigation funding. Legal fees will be disclosed after the settlement is approved and are expected to be approximately one-fifth of the settlement amount, meaning customers are expected to receive approximately $100 million of proceeds in the latter three cases.
When court approval is granted, Slater & Gordon will manage an individual customer compensation process. Many claims are for amounts around $500, with some customers paying premiums of up to thousands of dollars.
“Many group members told us that they could not have taken care of their bank on their own because they did not have the means, the time or the money, so the scheme of Australian class action lawsuit has enabled hundreds of thousands of people to band together, pursue claims profitably,” Slater & Gordon’s senior partner Alex Blennerhassett said The Australian Financial Review.
“We must not underestimate the importance of the class action regime in providing access to justice for ordinary Australians.”
Junk consumer credit insurance was targeted by ASIC in its 622 report, released in July 2019, which described it as a “poor value product” that came with “harmful sales practices.” The Royal Banking Commission has called for a ban on the “peddling” of insurance products.
The first of the class action lawsuits, against Westpac, was due to go to trial on Nov. 28, which has focused the banks on resolving the case before costly litigation begins. The three separate trials were to last four weeks each and follow each other.
Ineligible to make complaints
roofer & Gordon said many customers sold the policies were ineligible to make claims because they were already unemployed or had pre-existing health conditions or disabilities when they purchased the insurance, while some did not. had not given their consent to purchase the policies or had not been informed. they would be charged for it.
The lead plaintiff in the CBA case, Kristy Fordham, was sold loan protection without asking for it. Her serious health issues meant she was ineligible to claim major policy benefits.
“This is behavior that was making them a lot of money, so it’s time for those of us affected to be compensated,” she said in a statement released by the law firm.
The lead plaintiff in the ANZ case, Tracey Reilly, was sold credit card protection policies, but when she tried to make a claim she was told she was not eligible because that she had pre-existing symptoms which were later diagnosed as cancer.
Lead plaintiff in the Westpac case, Roger Kemp, had been sold loan repayment protection insurance, but would not have been eligible to make a claim for the non-renewal of his employment contract due to policy exclusions for contract workers.
roofer & Gordon shares were flat at 54¢ on Monday.
“Taking on the big banks was never going to be easy, but we’re glad we were able to resolve these group proceedings and that eligible customers are benefiting,” Ms Blennerhassett said.
“Class actions are a way for people to take on big business, including Australia’s big four banks.”
Separately, the CBA is facing another class action lawsuit in Federal Court this week. It was brought by law firm plaintiffs Maurice Blackburn and Phi Finney McDonald on behalf of shareholders alleging the bank failed to meet its obligations under continuous disclosure laws relating to the anti-money laundering action of AUSTRAC silver in 2017.
Former CBA chief executive Ian Narev testified on Monday in a trial that is expected to continue for another month, with a decision due next year. The ABC vigorously defends the action.
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