Big banks set to pay out

HUNDREDS of thousands of Australians could be eligible for compensation after a major class action win against Australia’s biggest banks and their insurers.

Law firm Slater and Gordon reached settlements with Commonwealth Bank (CBA), ANZ and Westpac worth a combined $126 million over consumer credit insurance which customers were sold while taking out personal loans and credit cards.

Many customers who were sold insurance were ineligible or unlikely to make a claim due to a number of factors, such as being unemployed or having pre-existing health conditions or diabetes when signing up.

Slater and Gordon said others did not provide consent to buy the policies, were not told they were optional or were not informed they would be charged for the product.

The lead plaintiff in the CBA proceedings said a bank employee told her there was no guarantee her loan would be approved if she didn’t take out the $25-a-month insurance policy.

That’s despite being ineligible to make a claim due to being unemployed and being diagnosed with serious health conditions such as chronic fatigue syndrome and fibromyalgia.

“I believe the bank knew full well that we couldn’t benefit from their products, but they deliberately sold them to us anyway,” the single mother of four said.

“We were all so vulnerable or else we wouldn’t have needed loans from them in the first place, yet they took advantage of that, in my opinion.

“It was behaviour that they made a lot of money from, so it’s about time those of us affected get compensated.”

Slater and Gordon class actions senior associate Alex Blennerhassett said “taking on the big banks was never going to be easy, but we are pleased that we have been able to resolve these group proceedings and that eligible customers will benefit”.

CBA and insurer Colonial Mutual Life Assurance Society reached a $50 million settlement.

Slater and Gordon reached a settlement amount of $47 million with ANZ and insurers OnePath Life, OnePath General Insurance, Zurich, and QBE.

Westpac and its insurers also reached a settlement worth $29 million.

Slater and Gordon said it would contact customers who were eligible for a portion of the settlement.

ANZ has confirmed it has reached an agreement with Slater and Gordon to settle the class action.

Westpac also acknowledged its $29 million settlement.

NCA NewsWire has contacted CBA for comment.