Aussies are being urged to check their old credit card and loan documents for dodgy insurance.
Millions of Aussies are owed junk insurance refunds, with billions of dollars still waiting to be claimed.
Junk insurance refers to ‘add-on’ insurance policies that provide little or no real coverage to policyholders. One common example is consumer credit insurance, which was often added to credit cards and loans.
Following the 2019 banking royal commission, financial institutions were ordered to set aside $10 billion to make amends with customers.
Up to 6 million Aussies could still be owed a share in the remaining billions, according to insurance-refund company Claimo.
“Many were convinced these insurances were a must-have during loan or credit acquisitions in the ‘90s and ‘00s. But, with billions still in the pot, it’s evident many Australians are yet to claim their due,” Claimo CEO Nathan Mortlock said.
Recent data from the Australian Financial Complaints Authority found complaints about consumer credit insurance had spiked.
There were 951 cases brought to the ombudsman in 2022, however, Claimo said there were still millions of people who hadn’t come forward.
While the refund amount will vary, Mortlock said some could “prove significant”, with one Victorian resident claiming $90,000.
How to claim a refund
Aussies are being urged to examine their old credit card statements and loan contracts. Look for terms like “credit card insurance”, “consumer credit insurance” and “loan protection”.
Claimo said consumers should check for a large fee on the contract or a monthly premium being deducted from their bank or credit card statements.
They can then call their provider and ask whether they’ve been sold consumer credit insurance or guaranteed asset protection (GAP), which was another common example.