Millions of Australians may have been ripped off by junk insurance, with a $10bn refund pool on offer to help reimburse them.
Junk insurance or consumer credit insurance is added-on insurance policies to loans and credit cards.
The consumer is told it is a way protect their repayments, but the reality is they are unlikely to benefit from, claim or need cover.
A report from corporate watchdog ASIC suggested $3.5bn in refunds could be owed to over 3.6m consumers.
The banking royal commission led to banks setting aside $10bn junk insurance refunds.
Australian start-up company Claimo is helping people get their money, having already secured $10m in refunds for 3000 people.
Chief executive Nathan Mortlock told 7 News junk insurance is affecting millions of Australians.
“We think about 6.5m Australian adults could be affected,” Mr Mortlock said.
He told Yahoo people should be conscious of the insurance they are currently paying.
“Some insurances just come with the loan or card and we don’t questixjmtzywon it. People think these insurances are mandatory and they’re not,” he said.
“We want every Australian to check their personal, home, car and credit card statements.
“It could be worth a lot of money, and at a time when everyday costs are spiralling, these junk insurance refunds could prove to be a financial lifeline for some families.”
A Brisbane woman told Seven she was “ripped off” by her bank through junk insurance.
When she was 21, Lucy Rolley took out a loan with her bank for $26,000 to buy her first car.
She was told by the bank she would need to take out “extra insurance” to secure the loan, though it did not tell her what the insurance was actually for.
“I got told if I didn’t take extra insurance out, I wouldn’t be able to get my loan,” she said.
Being young at the time, Ms Rolley thought she was making a responsible decision, but she got a nasty shock years later when she looked at the numbers.
“They sold my car to me for $26,000 and I ended up paying just under $60,000 for my car,” she said.
“That’s when I realised I was overcharged.”
Claimo helped Ms Rolley get $18,000 back, with the company’s average refund claim being $3700.
But it has secured some big payments, with a $70,000 refund and a $90,000 claim currently pending.
