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CBA faces $10m bill for ripping off customers

CBA faces $10m bill for ripping off customers

Commonwealth Bank will refund about $10 million after selling unsuitable consumer credit insurance to tens of thousands of Australians.

CBA sold insurance for credit card repayments to 65,000 customers “who were unlikely to meet the employment criteria and would be unable to claim the insurance”, according to ASIC, the financial services regulator.

The bank will also refund about $586,000 in premiums to about 10,000 home loan customers.

ASIC said CBA over-insured these customers for mortgage consumer credit insurance, resulting in the over-charging of premiums.

Regulator condemns CBA

Consumer credit insurance (CCI) is a type of add-on insurance that is sold with credit cards, personal loans, home loans and car loans. It is promoted to borrowers to help them meet their repayments if they become sick, injured or involuntarily unemployed.

ASIC deputy chair Peter Kell said it was unacceptable that customers were sold insurance that did not meet their needs.

“One of ASIC’s priorities is addressing poor consumer outcomes associated with add-on insurance, including CCI. Consumers should not be sold products that provide little or no benefit, and banks should have processes in place that ensure this.”

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Problem began in 2007

ASIC said that CBA would remediate customers who were sold CreditCard Plus between 2011 and 2015 and who were either unemployed or students at the time.

These customers were not eligible to claim for unemployment or temporary and permanent disability cover provided by CreditCard Plus.

Between 2007 and 2015, CBA also mis-sold its home loan consumer credit insurance product, according to ASIC.

Some customers who borrowed less than they’d originally applied for were charged premiums based on the higher application figure rather than the lower borrowing amount.

In some cases, cover was also provided and paid for before a loan was drawn down.

CBA and its insurance business, CommInsure, identified and reported these problems to ASIC.

ASIC has previously taken action against Westpac for similar conduct. The regulator said it would also review the past consumer credit insurance sales practices of other banks.

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This article was reviewed by Head of Content Leigh Stark before it was published as part of RateCity's Fact Check process.

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Learn more about credit cards

What does ANZ credit card insurance cover?

ANZ offers complimentary insurance on some of its credit cards, which can provide some protection against unforeseeable incidents, like the theft of your card. Depending on the type of credit card you own, you may be eligible for different insurances. For instance, most ANZ credit card customers may qualify for Purchase Protection Insurance and Extended Warranty Insurance. Customers who own premium credit cards may also be eligible for Guaranteed Pricing, Rental Vehicle Excess, International Travel, and so on.

Consider checking your ANZ credit card insurance features listed in the Insurance Policy Information booklet to know which items are covered. Also, while ANZ issued the credit card, they are not the insurer. For this reason, you may need to send your insurance claims - and get your ANZ credit card insurance refund - to the insurance provider.

How does CBA credit card insurance coverage work?

If you have a Commbank credit card, insurance may be one of the benefits on offer. 

You may be eligible for overseas medical and travel coverage, as well as coverage for interstate flight cancellations, transport accidents, extended warranty and price guarantees. You may need to check which types of insurance coverage you can access, as some types are not available to all customers. 

To apply for CBA credit card insurance, you can contact the bank via its website. It’s also worth checking which types of insurance are available automatically and which require you to fulfil some conditions. 

The  Commbank credit card purchase insurance - called Purchase Security -  is available to most CBA cardholders. You can find out more about the different types of insurance, their coverage limits and inclusions and exclusions in the Product Disclosure Statement.

Does Macquarie Bank offer any credit card insurance?

Yes, Macquarie Bank may offer credit card insurance; it just depends on the type of Macquarie Bank credit card you have. There is a range of credit card insurance offers you can benefit from when you take out a Macquarie Bank credit card.

If you have a Macquarie Black or Platinum credit card, you have access to travel insurance for you, your spouse and any dependent children while travelling overseas. Under this travel insurance you receive:

  • Interstate Flight Inconvenience Insurance, which provides cover for meals and clothing, depending on the delay
  • Medical Emergency Expense Cover, which offers you unlimited cover for most medical expenses, and limited cover for dental treatment and emergencies caused by an act of terrorism
  • Baggage, Money and Documents Cover, which is subject to certain sub-limits mentioned in the terms and conditions

As a Macquarie Bank credit cardholder, you could be eligible for Extended Warranty insurance, which provides an extension to the manufacturer’s Australian warranty on certain products. To access this cover, you must have purchased the product using your Macquarie Bank credit card.

Select Macquarie Bank credit cardholders might also be able to take advantage of Rental Vehicle Excess Insurance. This insurance will cover you for any excess or deductibles that you’re liable to pay during the rental period.

Most Macquarie Bank credit cards also come with purchase protection insurance which protects you against fraudulent transactions. You should check the terms and conditions to find out more.

Do I qualify for Bank of Melbourne credit card insurance?

You may be eligible for transit accident insurance, purchase security insurance, and extended warranty no matter which type of Bank of Melbourne credit card you own. 

Some credit card customers may get coverage for international or domestic travel insurance, rental vehicle excess in Australia, and price guarantee as well. 

However, the exact terms of the insurance coverage can differ based on the specific credit card. For instance, if you buy any personal items with a Level 1 credit card, your purchase security insurance may be valid for up to four months from the purchase date. For someone with a Level 2 credit card, such coverage may only be available for three months. 

Does Woolworths Qantas offer any credit card insurance?

Credit cards can be useful for managing your expenses, but they also come with other advantages like credit card insurance. Your Woolworths Qantas Platinum Credit Card may offer a host of complimentary insurance options, which include: 

  • Travel insurance: Cover for your whole family when they travel with you, with unlimited overseas medical emergency cover and $500,000 accident insurance for accidental loss of life.  
  • Purchase security insurance: If you purchase an eligible product with your Woolworths Qantas Platinum Credit Card, the cost of theft or damage that occurred within 90 days of the purchase will be covered, provided the amount doesn’t exceed the purchase price of the item or up to $2500 per event. 
  • Extended warranty insurance: If you purchase eligible goods with your Woolworths Qantas Platinum Credit Card, this complimentary insurance will extend the manufacturer’s Australian warranty by up to 12 months. 
  • Global hire car excess waiver: If you’re legally liable to pay an excess or deductible in the event of loss or damage to a rental vehicle that was booked using your Woolworths Qantas Platinum Credit Card, the costs will be covered. 

To find out more about Woolworths Qantas credit card insurance, you can call them on 1300 10 1234. 

What type of complimentary travel insurance is available with Citibank credit cards?

The Citi Prestige, Premier, Rewards, Emirates Citi World MasterCard, and Gold cards provide complimentary travel insurance to customers. These Citibank credit card insurance benefits are managed and issued by Allianz Global Assistance (AGA).

Depending on the type of card, the Citibank credit card insurance coverage may include:

  • Foreign travel insurance
  • A comprehensive insurance policy for foreign travel for up to six months
  • Transit accident insurance
  • Accidental injury or demise while travelling on aeroplanes, buses, trains, or ferries in foreign locations
  • Interstate flight inconvenience insurance
  • Cover for unexpected cancellations, damaged or lost baggage, flight delays, or rental vehicle excess expenses for up to 14 days while travelling within Australia.

To be eligible for the complimentary Citi credit card insurance, you must book tickets using your card or through the Citi Travel Program.

What is the American Express credit card insurance coverage?

Several American Express credit cards, including the Gold, Platinum and Green cards, come with international and domestic travel insurance, shopping and purchase protection and smartphone screen insurance. All you have to do to activate your American Express credit card insurance cover is use it to pay for eligible purchases, travel, and a smartphone.

The complimentary travel insurance requires you to be less than 80 years old with no pre-existing diseases and your travel must begin and end in Australia.

To make an American Express credit card insurance claim, you’ll need to lodge your request with Chubb Claim Centre within 30 days. Submit the form along with supporting documents like medical reports, original invoices and receipts. You can also contact Chubb on 1800 139 149 or file a claim via the Chubb website.

What does BOQ credit card insurance cover?

All BOQ credit cards come with purchase cover insurance and guaranteed pricing, which can be claimed by eligible customers without activation. Some premium cards may additionally cover international travel, transit accidents, and interstate flight inconveniences, as well as offering extended warranties in select circumstances. 

For instance, any “covered item” bought using your BOQ credit card may be eligible for purchase cover insurance if its value doesn’t exceed $10,000. Again, covered items usually include most business and household or personal items but exclude things like computer software, perishable food items, and arts and antiques. You should check your credit card’s product disclosure statement (PDS) to find out which of these complimentary insurances you may qualify for if any. 

How do I file a Virgin Money credit card insurance claim?

To make a claim, you can either call Allianz Global Assist at 1800 072 791 or visit their claims page. If you’re making a claim related to any travel-related complimentary insurance, such as international travel or transit accident insurance, you may need to visit their travel claims website. Again, for filing a claim while travelling overseas, you can call Allianz at +61 7 3305 7499.

Before filing your claim, consider checking which complimentary insurances are available with your Virgin Money credit card. Customers who own a ‘no annual fee’ or ‘low rate’ credit card don’t get these benefits, while some other credit cards only come with guaranteed pricing and transit accident insurance.

Remember that you’ll need to submit proof that your credit card offers the complimentary insurance benefit which you are claiming. You can read the credit card complimentary insurance terms and conditions for details regarding the benefits available on your credit card.

Does Bendigo Bank offer credit card insurance?

No matter which type of Bendigo Bank credit card you own, you may qualify for complimentary purchase protection insurance, extended warranties, and best price guarantee. 

If you are eligible for one or more of these complimentary insurances, you won’t need to activate them separately. Consider checking the coverage limits as well as the terms of purchase to find out if they apply to your purchases. For instance, the annual coverage limit under Bendigo Bank’s purchase protection insurance for one type of credit card is $25,000. However, the coverage limit per item is $5,000, and you may have to pay an excess of $250 every time you file a claim.

Some Bendigo Bank credit card customers may also qualify for mobile device insurance, which covers the accidental damage to or loss of your phone. Again, the coverage limit varies for repairing or replacing your phone,compared to repairing accidental damage to your phone’s screen. Other complimentary insurance offered by Bendigo Bank on some credit cards includes coverage for overseas travel, domestic flight inconvenience, and transit accidents. If you rent a car using an eligible Bendigo Bank credit card, you may be able to get a waiver on the car rental excess as well. 

Does St. George Bank offer any credit card insurance?

Depending on the type of card they hold St. George Bank credit cardholders can benefit from a host of various credit card insurance offerings including:

Complimentary overseas travel insurance, covering:

  • Medical and hospital expenses incurred while travelling overseas, with the exclusion of pre-existing conditions
  • Loss or damage to personal property
  • Legal liabilities
  • Loss or damage to rental vehicles
  • Unexpected cancellation of travel arrangements or any other unforeseen expenses

Complimentary purchase security insurance may be available to level 1 cardholders for four months and three months of complimentary insurance accessed by level 2 cardholders. This type of insurance covers loss, theft, and damage costs to eligible products purchased anywhere around the world, provided that the product was purchased using the St. George Bank credit card. 

Extended warranty insurance may be available to St. George Bank credit cardholders, which extends the manufacturer’s Australian warranty on certain products purchased. For example, if you purchase a pair of headphones that comes with 11 months of warranty, St. George Bank will provide an extended warranty of 11 months, provided the entire purchase is charged to the St. George Bank credit card. 

Select cardholders may be able to take advantage of St. George Bank’s rental vehicle excess insurance, which covers up to $5,500 for any excess or deductible which the cardholder is legally liable to pay during the rental period. 

What does Westpac credit card insurance cover?

If you own a Westpac credit card, one of the perks may be  free travel insurance. If you’re eligible, you may be covered if you get sick while travelling, have lost your luggage, have to cancel a trip or have an accident while you’re on the move.

Besides these standard inclusions, the Westpac credit card insurance policy may also cover you for hospital essentials, emergency dental treatment and alternative transport if your original plans go awry. It may also cover loss of income when you get back home after being sick  overseas and your pets’ boarding costs too.

If you have any queries, the Westpac credit card insurance contact number is 1800 091 710. You can submit a claim online.

 

What coverage does Coles credit card insurance offer?

Most customers who own a Coles credit card may be eligible for complimentary purchase protection insurance, but low rate card owners won’t receive this benefit. 

Some premium credit cards issued by Coles include transit accident insurance and extended warranty cover in addition to purchase protection insurance. Covered items paid for at least partially with your Coles credit card usually qualify for purchase protection insurance.

However, you may only be eligible for transit accident and extended warranty coverage if the entire travel cost or purchase price is billed to the eligible card. Additionally, the extended warranty coverage matches the manufacturer’s warranty up to a maximum of five years. If your credit card offers extended warranty, but the covered item comes with a six-year warranty, you're unlikely to receive the benefit.

What types of NAB credit card insurance are available?

If you hold a NAB Premium, Platinum or Signature credit card or a NAB Platinum Visa Debit card, you could be eligible for the bank’s free travel insurance. You may be covered for overseas travel and interstate flight changes, along with transport accidents, domestic hotel burglary, purchase protection, extended warranty and price protection. 

It’s important to note that the NAB credit card insurance only kicks in after you’ve made an eligible purchase, so you won’t get the credit card insurance benefits if you haven’t used the card.

To make a NAB credit card insurance claim, you can send an email to cardclaims@allianz-assistance.com.au. You can check the eligibility of your claim or make a claim online as well.

If you have a travel incident and need to speak to someone regarding your NAB credit card insurance, contact 24x7 Emergency Assistance on +61 7 3305 7499 (reverse charges may apply). You can also send an email to medical@allianz-assistance.com.au.