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3 financial institutions face class action over insurance advice

  • August 25 2020
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Invest

3 financial institutions face class action over insurance advice

By Cameron Micallef
August 25 2020

A class action lawsuit has been filed in the Federal Court against three large financial institutions, which have been accused of breaching its best interests duty obligations.

3 financial institutions face class action of insurance advice

3 financial institutions face class action over insurance advice

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  • August 25 2020
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A class action lawsuit has been filed in the Federal Court against three large financial institutions, which have been accused of breaching its best interests duty obligations.

3 financial institutions face class action of insurance advice

According to Shine Lawyers, half a million Australians were charged excessive insurance premiums in one of three cases they have filed.

The firm alleges that BT, CBA and AMP sold unsuspecting customers overpriced in-house life, income protection and TPD cover in practices exposed by the Hayne royal commission.

Class actions practice leader Craig Allsopp said they did this despite knowing there were equivalent or better policies with lower premiums available through other insurers.

“We argue all three financial services providers behaved in a way that was unfair and illegal,” Mr Allsopp said.

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“The sheer number of people affected by these premium rorts shows we’re not just talking about a few bad apples here but a systemic misconduct in the industry.”

Mr Allsopp said class actions were the best way for customers to get their money back because “there is strength in numbers”.

The allegations against the financial institutions state the amount of money customers lost varies from a couple of hundred to several thousand dollars, meaning individual cases would not be feasible. 

As a result, the law firm is calling for customers to be compensated for the “excess premiums” they paid as a result of “unethical financial advice and conduct”.

In an update to shareholders, CBA acknowledged the class action, adding that CFPL and FWL will be “reviewing the claim”.

This is the latest of a number of class actions filed by Shine Lawyers against major institutions with financial advice subsidiaries, including AMP and Westpac. 

3 financial institutions face class action over insurance advice
3 financial institutions face class action of insurance advice
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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