Banks face legal action

THE big banks could face a class action over the sale of millions of dollars of “worthless” credit card insurance.

The Commonwealth Bank of Australia has already admitted selling loan and credit card insurance to customers who were not eligible to make claims, and law firm Slater and Gordon is now investigating potential class actions on behalf of short-changed consumers.

The CBA last week said it was refunding $16 million to about 140,000 personal loan and mortgage insurance customers after finding people were sold policies they would not be able to claim on.