A South Australian woman has received a $28,000 cash payout through a junk insurance refund she had no idea she was eligible for.
Following a banking royal commission finding in 2019, financial institutions were ordered to set aside $10 billion to refund people who had purchased junk insurance.
WATCH THE VIDEO ABOVE: Millions of Australians owed a share of $1.6 billion over junk insurance.
For more Personal Finance related news and videos check out Personal Finance >>
Junk insurance refers to coverage that is either unnecessary or worthless.
Jennifer Whenan says she had been unwittingly paying a large amount on insurance premiums for three Latitude loans.
After seeing a news article about junk insurance refunds, she decided to give it a try.
“I said to my husband ‘I wonder if we could claim something from our Latitude loans’,” she told 7NEWS.com.au
“He thought we wouldn’t be that lucky and my mum was worried, when I told her I sent our details through to Claimo, that it was a scam.
“But I figured what did we have to lose … they offer a no win, no fee service.”
Whenan said she hoped she might receive a refund about $1000.
But to her surprise the total came to $28,000.
“This was a shock,” she said.
“The amount was actually the combined insurance premiums on three Latitude loans.
“We could have continued our journey and tried to get the interest owed on this, but we could have lost the lot if it didn’t go our way.”
Whenan says when she received the call, she thought it was all a joke.
“I’m pretty certain I said ‘Are you kidding? That’s insane!’,” she said.
“We have been living on one wage for nearly eight years as I was caring for our children.
“We have racked up a bit of credit card debt, so I knew where the money was going straight away.”
Whenan said it felt incredible paying off the credit cards, and she even had money left over to buy some clothes and household items.
The Australian Securities and Investments Commission says remediation is still available for millions of Australians for “fees for no-service misconduct or non-compliant advice” as well as “junk insurance” cashback payments.
A Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry 2019 report revealed millions of people had been duped into buying junk insurance.
New ASIC data released in September 2022 estimates a further $1.6 billion is yet to be paid to about 2.7 million consumers for remediation for both junk insurance and non-compliant advice.
“Our guidance puts the onus on industry to get on with fair and timely remediations – returning the money they owe to wronged consumers,” ASIC deputy chair Karen Chester said.
“To date, ASIC has needed to oversee large-scale remediations, to ensure affected consumers were treated fairly and received the compensation they were entitled to.”
Claimo CEO Nathan Mortlock said the most common reason people bought junk insurance was because they were told it was necessary.
“A lot of the time they were told they had to have that insurance to get that home loan back in the ‘90s and also the ‘00s, and we know that’s actually not the case,” he said.
How to claim
Australians are urged to keep an eye out for any correspondence from their banks, super funds, or any other financial institutions for more information about ongoing remediation programs.
Those who are unsure about any fees are urged to contact the financial institution which charged them to find out if they have been incorrectly charged.
For those customers who had policies with Freedom Insurance, there is a specific call to action. Anyone who has been with the insurance company at any time between 2010 and 2018 is urged to come forward to see if they are eligible for a refund.
More details about the refund can be found on the ASIC website here.
If you’d like to view this content, please adjust your .