- The policy was sold as being similar to life insurance
- Shine says this was unnecessary given there were cheaper policies with greater coverage
- Aussie says the product is offered by a third-party insurer through Aussie
Shine Lawyers has announced it is investigating a potential class action for homeowners whop were sold a policy by Aussie Home Loans that ultimately had limited or low value.
Tens of thousands of homeowners were sold the Mortgage Protection Policy despite it having little to no value.
The policy was described as similar in nature to life insurance – it would help cover home loan repayments in the event of the mortgage holder’s illness, loss of employment or death.
Shine alleges this was unnecessary as many customer already had similar and better coverage, and there were also other policies available that were cheaper and provided better cover.
The investigation will examine whether brokers owed a duty of care to act in the bet interest of their clients, and whether that duty was breached, and whether the sale of the product was deceptive or misleading, or amounted to unconscionable conduct.
Rebecca Jancauskas, Class Actions Practice Leader, said more often than not first homebuyers were forced to hand over an extra $1,000 or more annually to pay for such policies.
“It’s hard enough to get a foot on the property ladder, and if brokers are selling unnecessary insurance it makes it even harder,” said Ms Jancauskas.
“Buying a home is complex and stressful process. We’re investigating whether Aussie Home Loans exploited its clients by selling them a policy that was essentially worthless,” she said.
As part of the investigation, Shine is looking to speak with anybody who bought a Mortgage Protection Policy from Aussie Home Loans from September 2016 onwards.
An Aussie Home Loans spokesperson told The Property Tribune they offer thousands of mortgage and insurance products, but does not issue insurance itself.
“We are aware of media reports regarding a law firm reviewing aspects of an insurance product, offered by a third-party insurer through Aussie,” the spokesperson said.
“Aussie has not received any correspondence relating to these claims and therefore is unable to provide further comment.”
