Following an ASIC
surveillance campaign, Westpac is set to contact more than 10,600 customers to offer a refund over unneeded insurance premiums.
The major bank charged customers for loan protection insurance during periods when the customer did not have a loan and where the customer had no intention of being covered for the period, ASIC
said in a statement.
The refunds will affect two products, Mortgage Secure (MS) or Home Loan Protection (HLP), both of which were sold as consumer credit insurance since 2002 and 2007 respectively.
Surveillance from ASIC
uncovered that Westpac may have been collecting premiums before a home loan was drawn down, after a loan was repaid and where a customer did not go ahead with a home loan.
Deputy chair of ASIC
, Peter Kell
, said that the decision shows how important it is that products are sold correctly.
“It is important that a product is sold in a way that is consistent with what it is designed to do, in order to ensure that customers don’t pay for something they don’t need,” Kell said.
“In this case, Westpac customers may have been paying for insurance cover they did not need, either because it covered risks that were not present or risks against which they were already insured.”
Customers will be contacted by the bank from late October this year as ASIC
continues its crack-down on mis-sold CCI as CGU
, Accident and Health International
have all had dealings with ASIC
over the cover in the past year.