More than 65,000 Commonwealth Bank customers will be refunded a total of approximately $10 million after being sold “unsuitable” credit insurance.
The Bank says customers had been sold CreditCard Plus or Home Loan Protection insurance which is meant to help borrowers meet their repayments if they become sick, injured or involuntarily unemployed. But many of those who received the insurance weren’t eligible because they were either unemployed at the time or a student.
CommBank will also refund approximately $586,000 in premiums to around 10,000 customers after it over-insured those customers – resulting in customers being over-charged premiums.
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The bank will be contacting customers who were affected.
The Australian Securities & Investments Commission (ASIC) Deputy Chair Peter Kell said it was unacceptable that customers were sold insurance that did not meet their needs.
“Customers should not be sold products that provide little or not benefit, and banks should have processes in place to ensure this,” he said.