NAB agrees to pay $49.5m in CCI settlement - Mortgage Business

CCI sold with credit cards was found to consistently be the poorest value for money for consumers compared to other CCI products. 

Overall, the ASIC report found that:

• Consumers were sold CCI despite the fact they were ineligible to claim under their policy.
• Consumers were incorrectly charged for CCI, including being charged ongoing CCI premiums even though they no longer had a loan.
• Telephone sales staff used high-pressure selling and other unfair sales practices when selling CCI.
• Consumers were given non-compliant personal advice to buy unsuitable policies.
• CCI is “extremely poor value for money”, with consumers receiving only 11 cents in claims for every dollar paid in premiums.
• Across all CCI products sold by lenders, only 19 cents was recovered in claims for every premium dollar that consumers paid.
• Several lenders did not have consumer-focused processes to help consumers in hardship make a claim under their CCI policy.

Given the serious findings, ASIC has commenced enforcement investigations into a number of entities that have been involved in mis-selling CCI to consumers. The defendants to ASIC’s future action will reportedly be publicly identified at the time proceedings commence. 

It is also requiring lenders to remediate over 300,000 affected consumers with over $100 million to ensure that consumers who have not been treated fairly are appropriately remediated. 

To date, more than $51 million has been paid to over 186,000 consumers. 

NAB agrees to pay $49.5m in CCI settlement - Mortgage Business