Class action settlements totalling more than $126 million have been agreed over the sale of consumer credit insurance sold by Commonwealth Bank of Australia (CBA), ANZ and Westpac, legal firm Slater & Gordon says.
The settlements, subject to court approval and reached without admission of wrongdoing, are expected to result in up to 1 million customers being eligible to receive compensation, the law firm said today.
The CBA settlement for $50 million also involves defendants the Colonial Mutual Life Assurance Society and AIA Australia, the bank said in a statement today.
In the ANZ class action, a $47 million settlement was reached, with Slater & Gordon listing insurers as OnePath Life, OnePath General Insurance, Zurich and QBE.
ANZ says in a statement that it will contribute $42 million to the settlement, which relates to the sale of three products.
The Westpac settlement of $29 million lists insurers as Westpac Life Insurance and Westpac General Insurance.
Slater & Gordon says bank customers eligible for a share in the settlements will be contacted in due course and it expects distribution of funds will take place in the middle of next year
“Taking on the big banks was never going to be easy but we are pleased that we have been able to resolve these group proceedings and that eligible customers will benefit,” Class Actions Senior Associate Alex Blennerhassett said.
“Class actions are one way people can take on big corporations, including Australia’s Big Four banks.”
The law firm launched the three actions in 2020 over cases where customers were sold insurance related to credit cards or loans when they may have been ineligible or were unlikely to be able to make a claim because they were already unemployed or had pre-existing health conditions or disabilities.
Some may have never provided consent to purchase the policies, were not informed that the insurance was optional or were not informed that they would have to pay, the law firm says.
Slater & Gordon also initiated a class action during the Hayne royal commission, against National Australia Bank and MLC over consumer credit insurance policies on behalf of 50,000 customers. A $49.5 million settlement was reached in November 2019.