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‘Junk’ insurance puts banks under ASIC scrutiny

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The corporate regulator has found Australians are getting “extremely poor value for money” on their consumer credit insurance.

The “junk” insurance, offered by banks, helps to cover loans or credit card repayments if a person becomes unable to pay due to illness or unemployment.

But the Australian Securities and Investments Commission (ASIC) has found in some instances, people are being offered the insurance despite not being eligible to claim under their policy.

ASIC Commissioner Sean Hughes tells Ross Greenwood they condemn the way this insurance has been sold.

“The way in which this consumer credit insurance has been sold to consumers, in our view with some pretty unfair sales tactics, but also a particular focus on people who may not understand their rights and their ability to exit from these arrangements.”

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