AAP Finance

CBA admits insurance rip-off

By AAP Newswire

Oct 29, 2021

A man walks by a CBA branch. — CBA representatives pleaded guilty to selling insurance some customers could not use.

Commonwealth Bank representatives have pleaded guilty to 30 criminal charges of selling customers insurance they could not use.

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The bank sold the credit card and loan insurance from 2011 to 2015 and misled 165 customers about their ability to claim.

Customers were ineligible to claim if they were not working at the time of buying the insurance.

The bank failed to tell customers this, although it did provide a product disclosure statement.

The Australian Securities and Investments Commission, which has prompted the legal action, had earlier required salespeople to explain the main exclusions in policies.

Bank staff discovered the error in 2015 and soon required salespeople to explain the main exclusions. However it did not do so for online forms until 2017.

The victims of the credit card insurance paid $11 million in premiums and received $500,000 in claims.

The Commonwealth Director of Public Prosecutions is pursuing the case.

The mishandling of the insurance sales was detailed in the banking royal commission, which exposed a raft of dodgy practices in financial services. The commission ran from 2017 to 2019.

By AAP Newswire

Australian Associated Press