Millions of Australians could be unknowingly entitled to cash refunds worth well into the thousands.
The potential windfall is the result of dodgy ‘junk’ insurance policies attached to popular products such as loan autos and car loans, which are now subject to repayment due to the Royal Commission of 2019 against wrongdoing in the banking, pensions and financial services industries.
It recognized that this type of insurance policy was often unwanted by consumers, or they were unaware it was part of their loan, and instructed major banks to contribute to a $10 million reimbursement pool.
More than a million Australians aged 60 and over could be unknowingly entitled to millions in cash refunds
Nathan Mortlock (pictured), Director of Insurance Refund Experts, Claimo: “If you’ve ever had a credit card, taken out a loan or gotten financing to buy a car, chances are you’ve unknowingly paid for junk insurance and you are also entitled to a refund’
Claimo, an insurance reimbursement expert, told Daily Mail Australia on Friday: “Around six million Australians are owed a $10 billion ‘junk insurance’ payback pool – those over 60 make up about a sixth of the population.”
“If you’ve ever had a credit card, taken out a loan, or gotten financing to buy a car, chances are you unknowingly paid for legacy insurance and are entitled to a refund,” said director Nathan Mortlock.
“Unfortunately, we found that some of these insurance policies were charged at a compounding percentage that has cost consumers thousands, even up to tens of thousands of dollars over time.”
Claimo has already collected more than $10m in refunds for 3,000 Australians, but they insist this is just the tip of the iceberg.
HOW TO CHECK IF YOU ARE ELIGIBLE FOR A REFUND:
- Look at your credit card statements and loan agreements
- Look for the words “credit card insurance,” “consumer credit insurance,” or “loan protection” (may appear on or near the “Interest Rate Changes” line).
- If you find these or similar references, you’ve probably been charged for contaminated site insurance and could be entitled to a refund
The average Claimo refund is $3,400, with one customer receiving a massive $70,000 rebate while another claim of $90,000 is currently pending.
“If you’re over 60 and you’ve had loans during your lifetime, you’re very likely to be owed money,” Mortlock said.
“While any loan prior to 2018 is worth an investment, we now know that the 1990s were notorious for putting junk insurance on loans.
“Most victims don’t even know they paid for contaminated site insurance or that they may be entitled to a refund.
“Even if you had a loan from a reputable bank or lender – you should check it out.”
Mr Mortlock said some insurance companies “just come with the credit or the card” and we don’t question that.
“People think these insurances are mandatory, and they aren’t.”
He explained that is why the Royal Commission has ordered the banks to set aside the refund money but it is up to each individual to request a refund.
“You’re not going to get a call from your lender with an offer to return it,” he said.
David Stavropoulos, Chief Commercial Officer at Claimo and a former partner at an international law firm, told Daily Mail Australia: “For legitimate claims you may be entitled to compensatory interest on top of the premiums you are charged.”
The average Claimo refund is $3,400, with one customer receiving a massive $70,000 repayment while another $90,000 claim is currently pending (pictured women walking Pitt Street in Sydney, walk along NSW).
“In the case of a single premium paid in 2004, the compensatory interest is likely to be higher than the premium paid. This could effectively more than double the size of the potential refund.
“For example, a $2,000 insurance premium collected in 2004 could attract between $2,300 and $4,200 in compensatory interest.”
One happy Perth resident, Stuart Mitchell, said he was shocked when he received a call from Claimo asking for a refund for all the junk credit card insurance he’d paid for over the years.
“To be honest, I thought I might get $500 to $600 back,” Mr. Mitchell said.
“But when they said I was getting almost $16,000 refunded, I almost dropped the phone.”
Claimo’s service offers to request your documentation on your behalf if you do not have it. They review current and historical policies, including policies that have been taken out, paid out or otherwise transferred.
The process takes about one to three months on average.
“In the case of a single premium paid in 2004, the compensatory interest is likely to be higher than the premium paid. This could effectively more than double the amount of potential recovery,” said David Stavropoulos, Claimo’s chief commercial officer