ASIC has commenced civil penalty proceedings in the Federal Court against
ASIC's action relates to Westpac's Credit Card Repayment Protection and Flexi-Loan Repayment Protection policies which are add-on insurance products sold with credit cards and lines of credit.
ASIC alleges that from
* made false or misleading representations that customers had agreed to acquire, were liable to pay for and that Westpac had a right to charge for, CCI;
* asserted a right to payment for the CCI premiums which customers were not liable to pay;
* failed to ensure that its financial services were provided efficiently, honestly and fairly when it supplied CCI to customers who had not agreed to acquire CCI and debited premiums from those customers' accounts; and
* failed to comply with financial services laws, being the ASIC Act.
ASIC is seeking declarations and pecuniary penalties from the Federal Court.
The date for the first case management hearing is yet to be scheduled by the Court.
This action forms part of ASIC's priority to address consumer harms in insurance. It follows a detailed ASIC review of the sale of CCI by 11 major banks and other lenders. ASIC's Report 622, Consumer credit insurance: Poor value products and harmful sales practices, published in
ASIC Deputy Chair
'In addition to our enforcement action, ASIC has secured over
'ASIC will continue to take action where we identify potential breaches of the law where the design and sale of financial products to consumers fails the litmus test of section 912A – efficiency, honesty and fairness.'
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