Thousands of people to whom Aussie Home Loans has sold a policy deemed to be of limited value may soon participate in a class action lawsuit.
Shine Lawyers is investigating a potential class action lawsuit for homeowners after receiving an allegedly inadequate mortgage protection policy.
The policy was reportedly promoted as a way to help cover home loan repayments in the event of illness, job loss or death.
But Shine said it wasn’t necessary because many customers already had similar and better coverage, or there were cheaper policies that offered better coverage.
Shine will consider whether brokers have a duty of care towards their clients, whether this duty has been breached and whether their sale of the product was misleading or constituted inadmissible conduct.
Rebecca Jancauskas, head of class action, said it was often first-time homebuyers who were forced to pay $ 1,000 or more to pay for policies.
“Stepping on the ownership ladder is hard enough, and if brokers sell unnecessary insurance, that makes it even more difficult,” he said.
“Buying a home is a complex and stressful process. We are investigating whether Aussie Home Loans exploited its clients by selling them a substantially worthless policy.
Anyone who has purchased the Mortgage Protection Policy since September 2016 should contact Shine.
A spokesperson for Aussie Home Loans said he was aware of Shine’s investigation.
“We are aware of media reports from a law firm examining aspects of an insurance product, offered by a third-party insurer through Aussie,” they said.
“Aussie offers thousands of insurance and mortgage products through its approved panel, but does not issue insurance itself.
“Aussie has received no correspondence regarding these allegations and is therefore unable to provide further comment.”