Potential class action lawsuit against Aussie Home Loans over sale of mortgage protection policy with ‘little to no value’

  • The policy was sold as similar to life insurance
  • According to Shine, this was unnecessary as there were cheaper policies with greater coverage
  • According to Aussie, the product is offered by a third party insurer through Aussie

Shine Lawyers has announced that it is investigating a possible class action lawsuit for homeowners who have been sold a policy by Aussie Home Loans that ended up having limited or little value.

Tens of thousands of homeowners were sold the mortgage protection policy despite having little to no value.

The policy was described as similar to life insurance – it would help cover home loan repayments in the event of illness, job loss or death of the mortgagee.

Shine claims that this was unnecessary as many customers already had similar and better coverage and there were also other policies that were cheaper and offered better coverage.

The investigation will examine whether brokers had a duty of care to act in the betting interests of their customers and whether that duty was breached, and whether the sale of the product was deceptive, misleading or amounted to unscrupulous conduct.

Rebecca Jancauskas, class action practice manager, said first-time homebuyers were mostly forced to pay at least $1,000 or more annually to pay for such policies.

“It’s hard enough getting a foot up the real estate ladder, and when agents sell unnecessary insurance, it becomes even harder,” Ms Jancauskas said.

“Buying a home is a complex and stressful process. We are investigating whether Aussie Home Loans exploited its customers by selling them a policy that was essentially worthless,” she said.

As part of the investigation, Shine wants to speak to anyone who bought a mortgage protection policy from Aussie Home Loans as of September 2016.

A spokesman for Aussie Home Loans said The Grandstand They offer thousands of mortgage and insurance products but do not issue insurance themselves.

“We are aware of media reports of a law firm reviewing aspects of an insurance product offered by a third party insurer through Aussie,” the spokesman said.

“Aussie has not received any correspondence regarding these claims and is therefore unable to comment further.”

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