Hundreds of thousands of Australians today will receive a letter from the Federal Court informing them that they may be in line to get money back from their bank
Westpac, Australia’s second largest bank, faces a class action lawsuit from Slater and Gordon involving up to 368,000 of its customers over the sale of « risk insurance »
“The Royal Banking Commission has uncovered flagrant misconduct of major banks, which has wrested the confidence of unsuspecting customers; it is hoped that this class action will recover the money taken from them when pressured to purchase worthless products,” said Andrew Powell, president of the Slater Group And Gordon
Clients were sold with unwanted credit cards and personal loan insurance, or in other words policies that were of little or no value to them. In many cases, the buyer will not be able to file a claim against the policy at all
Westpac was not alone. The Royal Commission revealed a large number of cases in which such policies were directed at the sick, the disabled, and the unemployed
In one particularly horrific case, I heard a hearing of how unsolicited policies were sold to a 26-year-old man with Down syndrome totaling more than $ 100,000 by Freedom Insurance the insurance company later failed to cancel at his father’s request.
But while these hearings have long since ended, reform efforts by all banks continue.
In this case, Slater and Gordon’s class action lawsuit alleges « that many people were led to believe that insurance was compulsory or free, while others did not know that it had been sold out »
If successful, the case could see another major Westpac earnings hit. A similar claim against NAB, involving just 50,000 customers resulted in a payout of nearly $ 50 million.
On the bright side even this would pale compared to $ 1 3 billion Westpac was fined earlier this year for repeated breaches of anti-money laundering and terrorist financing laws.
Similar class action notices involving ANZ and the Commonwealth Bank are expected in the coming months
With misconduct already costing banks hundreds of millions of dollars, it looks like there might be more to come
Westpac Insurance and Royal Commission on Misconduct in the Banking, Retirement and Financial Services Sector
World News – Australia – 368,000 Westpac customers may qualify for a refund after purchasing the unwanted insurance
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