Up to six million Australians could be eligible for a billion dollar bailout following findings by the Royal Banking Commission.
The final report of the 2019 Royal Commission into misconduct in banking, pensions and financial services found that millions of people were duped into buying unwanted insurance. Junk insurance refers to insurance that is worthless or worthless.
Financial institutions have been ordered to shell out $10 billion to compensate people who bought unwanted insurance. But over time, industry experts say that there is still a large unclaimed share.
One service that helps process refunds is Claimo. Its chief executive, Nathan Mortlock, said that what often happens is that people buy insurance they don’t need because they are told it is necessary.
“A lot of times they were told that they had to have this insurance to get this home loan in the 90s and in the 00s, and we know that’s not the case,” he said. The amount of compensation people receive varies, he said.
In some cases, it can be more than $10,000. “Really the feedback we’re getting is that compensation can change lives,” he said.
Queensland man Stuart Mitchell is one of the recipients of the bill. He had taken a loan to buy a motorbike, but he didn’t realize he was being overcharged on the way.
After the royal staff released their findings, he said he spent weeks debating whether to answer. “We thought, ‘well, might as well try it, we’re not going to lose anything and we might get a few hundred dollars back,'” he said.
It turned out to be more than that – $15,000. “I almost fell back.”
So how do you know if you qualify for unwanted insurance coverage?
This favorite process isn’t fun – wading through old credit card statements and loan agreements. Keywords to search for are “credit card insurance”, “consumer credit insurance” and “loan security”.