Millions of Aussies are owed billions of dollars in unclaimed junk insurance refunds and have been urged to check their eligibility.
Following a banking royal commission finding in 2019, financial institutions were ordered to set aside $10 billion to refund people who had purchased junk insurance for their credit cards or loans.
Junk insurance refers to coverage that is either unnecessary or worthless.
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According to Claimo, a company that assists Australians with junk insurance refunds, recent Australian Financial Complaints Authority (AFCA) data shows complaints about Consumer Credit Insurance are increasing.
More than 900 cases were brought to the Ombudsman in 2022, however Claimo says this is nothing compared with the millions of people still yet to come forward and claim their refund.
“Many were convinced these insurances were a must-have during loan or credit acquisitions in the 1990s and 2000s,” Claimo chief executive Nathan Mortlock said.
“But with billions still in the pot, it’s evident many Australians are yet to claim their due.
“For many, these refunds can prove significant, with one customer claiming $90,000.”
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That customer was mother-of-two Tracey, who recouped the significant sum of money after watching a 7NEWS segment about junk insurance.
“When I heard the segment I went ‘Oh my goodness’ and quickly wrote all the information down,” she told 7NEWS.com.au.
Tracey said she had been unwittingly paying a large amount on insurance premiums for income protection insurance.
“I got a new credit card and I kept getting phone calls and was constantly offered this insurance … and they made it out like it was something I had to have,” she said.
“So in the end, I just agreed.”
The mother of two contacted Claimo, who helped her claim her refund.
Tracey’s bank originally calculated the return at $25,000, however AFCA ruled in Tracey’s favour and she received a huge $90,000 refund.
“I was gobsmacked,” she said.
How to claim your refund
Claimo says Aussies should go through their old credit card statements and loan contracts and look for the following terms: “credit card insurance”, “consumer credit insurance”, and “loan protection”.
Consumers should check for a large fee on the contract or a monthly premium that has been taken from their bank or credit card statements.
They should then call their financial institution and ask whether they’ve been sold Consumer Credit Insurance or Guaranteed Asset protection.
For customers who had policies with Freedom Insurance, there is a specific call to action. Anyone who has been with the insurance company at any time between 2010 and 2018 is urged to come forward to see if they are eligible for a refund.
More details about the refund can be found on the ASIC website.
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