Corporate watchdog takes major insurance company to court for allegedly misleading customers
The Australian Securities and Investments Commission (ASIC) is taking a major Australian insurance company to court for allegedly issuing hundreds of thousands of misleading insurance policy renewals.
The corporate watchdog is alleging that the Royal Automobile Club of Queensland (RACQ) understated premium increases, discouraging customers from shopping around.
Retiree John Monks opened up his RACQ home insurance renewal last November, however, he noticed that the numbers did not match.
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RACQ, Queensland's largest insurer, allegedly misled more than 570,000 customers. Nine
His notice showed that his "last period premium" came out to $6930, and his latest one was $7033, a 1.5 per cent increase.
But this was misleading, because he had negotiated a lower premium of $5024, which meant the true price hike was a massive 40 per cent.
"Nothing happened, no claims, no increase above normal CPI in the cover or anything. So I wasn't that happy with that," he said.
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ASIC is alleging that RACQ understated premium increases, discouraging customers from shopping around. Nine
"I felt betrayed, firstly with the increase in premium, but by this misleading statement," Monks added.
ASIC claims that this isn't the only time that this has happened. Today, they alleged that RACQ misled more than 570,000 customers with misleading renewal notices from September 2019 to December 2024.
ASIC also claims that Queensland's largest insurer began receiving complaints from customers two days after the practice started, and continued for five years.
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RACQ is committed to working with ASIC to resolve the issue. Australian Financial Review
In a statement, RACQ says it changed the way that it communicates premium increases earlier this year and is committed to working with ASIC to fix the issue.
While this mainly affects customers in Queensland and northern New South Wales, ASIC is investigating whether the issue is more widespread, particularly in car insurance renewals.
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