Hundreds of thousands of Australians who were charged "excessive insurance premiums" may be eligible to make a claim for compensation as part of three class actions against some of the country's most popular insurers.
While claims have already been filed against AMP this week in the Federal Court, similar proceedings are set to be launched against the Commonwealth Bank and Westpac Group's BT in the coming days.
Shine Lawyers will claim the companies set up systems to sell "unsuspecting customers" overpriced in-house life insurance and income protection policies through their financial advisers, despite knowing there were equivalent or better policies with lower premiums.
Practice Leader Craig Allsopp said the combined actions would be one of the biggest moves against financial institutions in the wake of the Banking Royal Commission.
"In essence we'll be claiming that their business models were set up to promote their own products and their own interests ahead of those of their own clients and their members," he said.
Mr Allsop said the case against AMP and the Commonwealth Bank would be that they gave financial advisers product lists that were "stacked with in-house products".
He said they also provided incentives to place clients into their life insurance and income protection policies — even if there were better policies available elsewhere.
"These advisors were recommending their own policies on which they would get kick-backs, instead of giving clients genuine objective advice," he said.
Mr Allsop said while action against AMP and the Commonwealth Bank would focus on policies offered through advisers, action against BT would involve policies offered directly through its superannuation packages.
'Not many people would notice'
Former BT customer Sophie Ruse said she did not initially notice the "high fees" being deducted from her superannuation account after opening a new account.
"They told me they had a deal going at the time where they were offering customers incremental increases in the amount that you were covered for as far as your life insurance was concerned," she said.
"Obviously the amount of fees went up.
"It's probably an amount not many people would notice unless people are keeping a very close eye on what they're taking out on a regular basis.
"They're taking money from average people who basically aren't going to have enough in their super to retire on anyway — so it's pretty low."
AMP released a statement to the Australian Securities Exchange (ASX) late yesterday in response to the court action saying it was committed to meeting its obligations to ensure its advisers "act in the best interests of clients".
"We encourage any clients who have concerns to contact AMP directly or their financial adviser."
Both Commonwealth Bank and BT declined to comment as legal proceedings against them had not commenced.
