ASIC has launched legal action against Auto & General Services Pty Ltd, the insurer managing Budget Direct products, after 39,000 customers were alleged to have been overcharged for premiums over several years.
The misconduct occurred between March 2020 and July 2024, the regulator says.
It is seeking declarations and fines from the court.Â
Significant discounts of up to 30 per cent for Budget Direct customers who purchased car, home or motorbike insurance policies online were promoted.
It is alleged the advertising was misleading because customers were not told the online discounts would be removed following any changes made to their policies, such as a change in address.
The average premium discount loss amounted to almost $100.
It is alleged Auto & General first became aware of the problem as early as 2016, but failed to inform affected customers for years.
Staff did not immediately try to fix the problem.
ASIC deputy chair Sarah Court said the case highlighted the importance of the regulator's prioritisation of enforcement on misleading pricing practices.
"Australians should be able to take insurers at their word, especially when it comes to discounts that influence their decision to take up a policy and compare it to other products in the market," she said.
"We allege Budget Direct's conduct was misleading and deprived tens of thousands of Australians millions of dollars in savings they were promised."
Auto & General has since paid more than $3.8 million in remediation inclusive of interest to the 39,000 customers impacted during the almost four-year period.
27°C