Allianz Australia has been ordered to refund more than 15,000 customers, after the firm was found to have widely mis-sold consumer credit insurance.
In a statement released today, industry regularly ASIC said the cost of refunds would likely exceed $8 million after thousands of customers purchased unsuitable or impractical products, including mortgage and loan protection policies.
“Disappointingly, our work on the sale of CCI has highlighted widespread mis-selling and poor product design,” said ASIC commissioner Sean Hughes.
The regulator also added that Allianz had incorrectly sold insurance cover to people ineligible to claim for unemployment or disability, and death cover to customers under 21 years of age, who were unlikely to need it.
The refund, which is just the latest in a growing line of penalties for Australia’s financial giants, also covers fees charged to customers who paid premiums by the month without adequate disclosure.
Last week, ASIC pledged to file lawsuits against some of the country’s biggest financial institutions as it boosts its capacity to probe misconduct.
Earlier this month, the country’s prudential regulator ordered another local unit of Allianz to set aside an additional $250 million, due to shortfalls in its risk governance self-assessment.