What is CCI?
When applying for a personal loan, a credit card, or a mortgage, you might be offered an optional product called Consumer Credit Insurance or Loan Protection Insurance. Its job is to cover you in the event you are unable to make the payments to your loan due to circumstances out of your control. There are different types of cover and policies available, and no two polices are the same! But they generally cover situations like death, unemployment, disability, and illness or injury that is preventing you from earning an income. It is also important to understand that sometimes CCI may not cover all of the debt that you owe, and potentially it might only pay out a percentage of the outstanding debt, if the claim isn’t denied or withdrawn. Now this would depend on your exact policy inclusions and exclusions, which should have been explained to you. Including any pre-existing health conditions that could have an affect on the policy paying you. Can be so confusing!
Why Was CCI Purchased?
Consumer Credit Insurance is bought with the intention of providing cover in the event that the consumer cannot make credit repayments due to death, unemployment, disability, illness, or injury. It should be sold as a precautionary product, but is often marketed as a necessity for all, and as protection for something that is likely, and almost surely going to happen. After a few risky stories later…. you may find yourself scared not to have it! If the insurance conversation was even had in the first place of course.
Unfortunately, this is proven in so many ways through the number of clients who end up with this product that they didn’t want, need, and often aren’t even eligible for.
Examples of mis-sold CCI
Here are some examples of how CCI can easily be mis-sold to a consumer:
- Added into original loan paperwork without the client knowing about, or having agreed to
- Salespeople disguising the product as a part of a package that they sell rather than an individual item that isn’t mandatory to accept
- Selling the insurance to someone who might already be covered by another policy – potentially through their employment contracts or through Life, Income, and Home insurance that you may have already purchased
- Exempt Visa Holders.
- Insurance being sold to consumers who might not qualify for that type of cover – someone who is unemployed or working casually may lessen the likelihood of a pay out
- Special exclusion clauses may not have been explained – like pre-existing medical conditions may void any pay-outs due to illness or disability
How do I know if CCI was unknowingly added to my policy?
Unfortunately, one of the most deceitful forms of mis-sold insurance comes from lenders discreetly including it into your original loan documentation and paperwork without you knowing about it or having agreed to it. It is Australian Law that before you buy insurance you are provided the product disclosure document to read and understand. This will help you make a decision if the Insurance is right for you by choice.
Most consumers were never given these documents to risk highlighting the insurance they had paid for. If you were lucky enough to be given your Certificate of Insurance this should have an itemised listing of the insurance products you have purchased, along with important information such as:
- Your policy number
- Period of insurance
- Cost or Premiums
If the policy wording or the information proves to be confusing or unclear, you can contact your insurance provider and ask them to explain all of that itemised information in detail.
How do I claim back mis-sold CCI?
Over the last three years, numerous class actions have taken place which is good news, as this draws attention to some of the problems of CCI and other similar products that were not sold correctly and on occasions unknowingly.
However, what this does for the consumer is drag them into pool of people where they get an average pay-out which in most cases is nowhere near enough of what they are owed, prohibiting them from taking their complaint directly as an individual and without sometimes the choice to opt in or out in the first place.
Thankfully this is where our industry expertise comes in! We want to make the consumer aware that even when they have entered into a class action, depending where the case is up to, they can remove themselves and we can help take the complaint direct for you.
We take care of the entire claims process for you:
- Provide us with your details, including loan contracts if you can (If not we can help)
- We analyse these details and call you to finalise your claim>
- We submit your refund claim(s)
- You get paid!