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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: Nation’s big banks facing class actions over ‘worthless’ credit card insurance

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Nation’s big banks facing class actions over ‘worthless’ credit card insurance

News Corp Australia Network March 11, 2018 10:00pm

John Rolfe

 

EXCLUSIVE: Banks are set to face class actions from more than 100,000 customers duped into paying $40 million-plus for “worthless” credit-card insurance.

Law firm Slater and Gordon is investigating the potential for filing proceedings against each of the Four Pillars over credit-card insurance, or CCI, which is meant to cover repayments if a borrower becomes sick, injured or involuntarily unemployed.

However, the firm says often CCI has been sold to people who didn’t have a job, already had an income protection policy, were over a maximum age or ineligible because they worked for themselves.

The shoddy sales practices have inflated already high profitability of CCI: for every $4 banks take in premiums only $1 is paid out in claims; for other types of insurance about $3 is returned to policyholders.

The Australian Securities and Investments (ASIC) has already forced Commonwealth Bank to refund $10 million of CCI premiums paid by 65,000 customers — all students or unemployed. Ibisworld data shows CBA has a quarter of the credit card market, meaning the total size of the actions under contemplation could be $40 to $50 million, said Slater and Gordon senior associate Andrew Paull.

“That’s not outside of the ballpark,” Mr Paull told News Corp Australia.

More than 100,000 people could be eligible to join, he said.

Not only has CCI been sold to people who could never make a claim, Mr Paull said many customers had not agreed to buy it — the bank may not have made it clear the cover was optional or got the customer to confirm they wanted it.

“We have found substantial evidence to suggest that a large number of Australian credit-card holders are paying hundreds, if not thousands, of dollars a year for essentially worthless insurance,” Mr Paull said.

These practices could amount to unconscionable conduct in breach of the ASIC Act.

Mr Paull said the firm wouldn’t simultaneously go after CBA, Westpac, NAB and ANZ. Instead, based on feedback from bank customers, it would pick a single institution to target first — the one “most egregiously involved in these problems”.

CBA last week said it would stop selling CCI altogether, seeking to neutralise a potential issue at the Financial Services Royal Commission, which begins hearings Tuesday.

While other banks were quick to follow CBA’s lead in dumping ATM fees last September, no other institution has indicated it will get out of CCI.

Consumer groups say they must.

“Rubbish consumer credit insurance needs to be buried away,” said Consumer Action Law Centre CEO Gerard Brody.

One CBA customer, who asked to remain unnamed for fear it would affect refinancing, said she discovered the bank had taken $500 in CCI premiums over three years without her approval.

 

“I queried it and it was refunded,” the customer said. “How many people have they been charging like that?”

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