The ASIC Commissioner is "deeply troubled" by how the banks "unfairly" sold junk insurance to credit card customers.
And he's issued a warning - We're coming to get you.
Eleven of Australia's big banks and some of the big credit unions face "significant enforcement action" from the corporate watchdog, the Australian Securities and Investments Commission over the high pressure selling of junk insurance to credit card customers.
The credit card insurance products "consistently failed consumers" and represented "very poor value for money."
The big four banks and many of the second-tier banks and big credit unions sold consumer credit insurance (CCI) with credit cards to customers that were ineligible to make a claim and gave non-compliant financial advice according to the regulator.
ASIC Commissioner Sean Hughes said he is "deeply troubled" by the "stories of unfair practices occurring within Australia's largest and most well-known financial institutions."
Commissioner Hughes said ASIC will be "taking significant enforcement action against some of the entities named in our report."
Commissioner Hughes said ASIC will be "taking significant enforcement action against some of the entities named in our report."
ASIC also wants to completely ban CCI and is demanding that any bank or institution that sells CCI give the customer a four day "deferred sale" period.
ASIC has already forced CCI sellers to repay over $51 million to 186,000 CCI customers and wants to increase that to $100 million and 300,000 customers.
"All options are on the table," said Sean Hughes as he told banks and credit unions he expects an immediate improvement in CCI product value and sales techniques.
In December 2017 ASIC started a review of how eleven lenders sold CCI to consumers. The lenders were:
- ANZ Bank
- Australian Central Credit Union
- Bank of Queensland
- Bendigo and Adelaide Bank
- Citi
- Commonwealth Bank and Bankwest
- Credit Union Australia
- Latitude
- National Australia Bank
- Suncorp
- Westpac
ASIC MoneySmart has more information on consumer credit insurance.
Compare credit cards from Australia's banks, credit unions and other lenders at InfoChoice.
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.
