Commonwealth Bank will refund customers $10 million worth of insurance.
ASIC has slammed Commonwealth Bank’s “unacceptable” move to charge 65,000 people with insurance premiums that would be unlikely to ever claim on, The Age reports.
The bank sold consumer credit insurance, a type of credit add on to protect borrowers if they are injured or sick or involuntarily unemployed, to thousands of people who were unlikely to meet the employment criteria, the regulator said.
“They were therefore not eligible to claim for unemployment or temporary and permanent disability cover provided by the CCI,” ASIC said in a statement on Monday. “The vast majority of customers were students with lower credit card limits.”
$586,000 in premiums will also be refunded to about 10,000 customers who were over insured for Home Loan Protection CCI.
A Commonwealth Bank spokesperson said the bank would proactively contact affected customers to let them know about the refund.