‘Premium Rort’: Thousands of Aussie victims unaware of rip-off insurance scheme
02 March 2019
Many Australians who have been slugged with excessive insurance fees don’t realise they have been the victim of a “premium rort” and could be eligible to make a claim for thousands of dollars in compensation, Shine Lawyers has alleged.
The firm launched a lawsuit against Westpac in the Federal Court in 2017, alleging the bank and its subsidiaries charged their own financial planning customers more for Westpac branded products, in breach of their obligations.
National Class Actions Leader Jan Saddler said it was common practice for Westpac to upsell or funnel its customers into expensive insurance products when cheaper policies were available, and Shine Lawyers allege more than 100,000 people could have been affected.
“We allege Westpac quietly and systematically overcharged excessive fees from their own customers to make millions in profits at the expense of those customers,” Ms Saddler said.
Shine Lawyers’ investigations indicate that the average customer was overcharged between 4.5% and 10% in annual premiums.
“People trust their bank, so in almost all cases this conduct is unknown by consumers and has gone undetected, which is why we are urging people to contact Shine Lawyers so we can help them to see if they are affected and if so to be a part of the class action,” Ms Saddler said.
“The behaviour by the banks is a slap in the face to hardworking Australians and not only does Westpac need to be called out for its premium rort but it also needs to compensate its customers.”
Lead applicant Greg Lenthall was working as a cook on a low-income in 2012 when he signed up to a Westpac Life Insurance with an in-house financial advisor at his local Westpac branch.
Mr Lenthall was only earning $750-fortnight when he signed up, but he was charged approximately $400-month in premiums from his retirement savings.
“I trusted the financial advisor to make the best decision for me, in my circumstances, and I thought I was getting a good deal, but I was very let down,” Mr Lenthall said.
“It was a rort, it was wrong, and we all deserve to get back what is rightfully ours.” To be eligible for the class action you must have obtained insurance issued by Westpac Life after 21 February 2011, on the recommendation of a financial adviser at Westpac, St George Bank, Bank of Melbourne, BankSA or BT Advice.
“This case allows people to fight for their money back with the strength in numbers afforded to them by a class action,” Ms Saddler said.
“Members can expect a claim of at least $1,000, with some individual cases as much as $10,000.”
To learn more about the Westpac Life Insurance Class Action and find out if you are eligible to join, please click here.
Shine Lawyers are running several other class actions on behalf of hundreds of thousands of Australians who have been wrongfully overcharged through their insurance. To learn more about these actions, please click here.