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Law firm hits big 4 bank and its subsidiary with class action

A national law firm has officially launched a consumer credit insurance class action against one of Australia’s big four banks and one of its subsidiaries. 

user iconEmma Musgrave 27 September 2018 Big Law
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Slater and Gordon has filed class action proceedings in the Federal Court against National Australia Bank (NAB) and MLC Limited “on behalf of customers sold worthless credit card insurance”, according to a statement from the firm. MLC is a subsidiary of NAB and its wealth management business, and provides Australian corporate, institutional and retail customers investment, superannuation, insurance and financial advice.

The class action against NAB and MLC will allege they both engaged in unconscionable conduct, in contravention of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act), by selling insurance to card holders who were ineligible to claim under the terms of the policy, according to Slater and Gordon class actions principal Andrew Paull.

“All of the claimants had a NAB credit card and were then offered NAB credit card insurance,” Mr Paull said.

 
 

“However, it was highly unlikely that they would benefit from this policy. Most were existing NAB customers and the bank should have known the insurance was likely to be of little or no benefit to them. Despite knowing this, NAB have continued to push the insurance widely, reaping millions in premiums while doing so.”

Mr Paull explained most people were “sold the insurance over the phone and were not given a reasonable opportunity to understand the terms and conditions of the policy”.

“In the case of the life cover, the policy was of minimal value to many customers. NAB admitted as much in the royal commission," he said.

“Both NAB and MLC were in much stronger bargaining positions than any of the people they were contacting and selling this insurance to. They have taken advantage of hundreds, potentially thousands of their loyal customers.”

To further his point, Mr Paull pointed to Jessica Purcell, who was a full time university student when she was “pressured” to take out consumer credit insurance, “despite being a casual employee at the time and ineligible to claim certain aspects of the policy”.

“It was sold to me like it was something that I had to take out. I honestly wouldn’t have thought twice about it if I hadn’t heard about the class action. I would have just kept paying it,” Ms Purcell said.

Mr Paull noted: “We believe NAB’s and MLC’s conduct falls well short of the standard of behaviour the industry expects”.

“In short, they have taken advantage of people knowing that they can’t cover them,” he said.

“NAB and MLC have been fleecing consumers of millions and it’s only right that they pay it back.”