Another review of bank insurance? It all adds up

SPARE me from yet another committee trying to obscure the bad behaviour of Australian banks.

Surely we have enough already. And surely we all see these empty public relations exercises have done nothing to benefit us, the consumers and customers.

But here we go again. This week it’s a “working group” to look at the longcomplained about and well documented strategy of the banks selling add-on in- surance policies to people applying for loans and credit cards.

This latest working group has been set up by the corporate watchdog (woof) the Australian Securities and Investments Commission but, jeez, I’m not holding out much hope.

ASIC has been mighty blind to this problem for a very long time. The practices and complaints have been rife in Australia for, well, ever. But, OK, ASIC’s finally going to do something about it. Or is it? Set up a “working group” to have a think about the issue. Of course!

And, naturally, the usual suspects are in the group — namely the foxes. You know, the foxes that get in the henhouse and eat all the eggs and in their greed also eat the source of their bounty, the hens.

Well, the foxes, in the form of the banks, have again been invited to this new group, no doubt to stare down the consumers and offer roadblocks as to why improvements can’t be made.

If they didn’t have a track record of being foxes, taking their customers’ money and going on to ruining them, well, we could have a bit more confidence in this process. Pity ASIC hasn’t noticed the trail of devastation to date.

The practice this new group is going to think about is that of adding on dodgy insurance policies to home loans, credit cards and car loans. Consumer credit insurance. These insurance policies are supposed to cover the debt repayments should you get sick or lose your job, but they are notorious for not paying out. Yeah, who would have thought! And they are notorious for making the banks a lot of money. Yeah, who would have thought!

Just ask QBE Insurance which this week agreed to refund $16 million in dodgy insurance premiums.

But back to the banks and ASIC, and the decision to finally set up a working group to think about a problem that has existed and been scamming people for decades.

I think we get a hint of the quality of any likely solution from ASIC’s suggestions this week to the banks. While the working party is, um, working, in the meantime ASIC would like the banks to create a gap of four days between the customer taking out the loan and the bank signing them up for one of these known, documented and notoriously dodgy insurance policies.

Yes, you read correctly. ASIC’s not banning the policies, not insisting they fix them so the customer isn’t ripped off. No. Just asking the banks to make two sales calls instead of one. Same old policies. Same old rip-off.