Following an ASIC surveillance, Westpac is to write to over 10,600 customers offering to refund premiums paid for consumer credit insurance (CCI). The offer to refund the insurance premiums comes after ASIC discovered that Westpac may have been providing insurance in circumstances where that insurance was not needed. Of particular concern to ASIC were circumstances where Westpac may have been collecting premiums for its Mortgage Secure and Home Loan Protection products before a home loan was drawn down, after a home loan was repaid, or where a customer did not go ahead with the home loan.
ASIC acknowledged Westpac’s cooperation in responding to ASIC’s concerns and Westpac stopped offering the MS and HLP products to new customers in June 2015.
ASIC Deputy Chair Peter Kell said, ‘It is important that a product is sold in a way that is consistent with what it is designed to do, in order to ensure that customers don’t pay for something they don’t need.’
This latest investigation highlights the attention ASIC is currently giving to the sale of CCI policies. Earlier this year, CGU Insurance and Accident and Health International Underwriting were forced to refund $2 million after the Federal Court found them to have acted ‘unconscionably in selling a payday loan CCI product’. Allianz also agreed to refund about $400,000 in CCI product premiums in March in related circumstances.
Read the full ASIC media release here.