Six million Aussies could be eligible for a cash refund (2024)

Millions of Australians could unknowingly be eligible for a cash refund worth well into the thousands.

The potential windfall is the result of dodgy 'junk' insurance policies attached to popular products such as credit cars and car loans that are now required to be repaid as a result of the 2019 Royal Commission into Misconduct in the Banking, Superannuation and Financial Service Industry.

It recognised this type of insurance policy was often unwanted by consumers, or they were unaware it was part of their loan, and directed major banks to contribute to a $10million refund pool.

Insurance refund experts, Claimo, told Daily Mail Australia on Friday: 'A $10 billion 'junk insurance' refund pool is owed to around six millions Australians - over 60s account for around a sixth of the population.'

'If you've ever had a credit card, taken out a loan or obtained finance to buy a car, you're likely to have unknowingly paid for junk insurance and are eligible for a refund,' director Nathan Mortlock said.

'Shamefully, we've found some of these insurances have been charged as a compounding percentage, which over time has cost consumers thousands, even up to tens of thousands of dollars.'

Claimo has already recovered more than $10million in refunds for 3,000 Australians, but they insist that this is just the tip of the iceberg.

The average Claimo refund is $3,400, with one client achieving a massive return of $70,000, while another $90,000 claim is currently pending.

'If you're over 60 and had loans during your lifetime, you are very likely to be owed money,' Mr Mortlock said.

'Although any loan prior to 2018 is worth investing, we now know the '90s were notorious for attaching junk insurance to loans.

'Most victims don't even know they have paid for junk insurance, or could be owed a refund.

'Even if you had a loan with a respectable bank or lender - you should still check.'

Mr Mortlock said that that some insurances 'just come with the loan or card' and we don't question it.

'People think these insurances are mandatory and they're not.'

He explained this was the reason the Royal Commission had ordered the banks to put aside the refund money but that it was up to each individual to apply for a refund.

'You won't be getting a call from your lender with a offer to give it back,' he said.

David Stavropoulos, Chief Commercial Officer at Claimo and a former partner at an international law firm, told Daily Mail Australia: 'For eligible claims, you may be entitled to compensatory interest in addition to the premiums you have been charged.'

'For a single premium paid in 2004, the compensatory interest is likely to be higher than the premium paid. This could effectively more than double the size of the potential refund.

'For example, a $2,000 insurance premium charged in 2004, could attract between $2,300 and $4,200 in compensatory interest.'

One lucky Perth resident, Stuart Mitchell, said he was shocked when he received a call from Claimo about a refund for all the junk credit card insurance he had paid over the years.

'To be honest, I thought I might get back $500-$600,' Mr Mitchell said.

'But when they said I'd be refunded nearly $16,000 - I nearly dropped the phone.'

Claimo's service offers to request your documentation on your behalf if you don't have it. They will check current and historic policies, including ones that are closed, paid out, or have been transferred elsewhere.

The process takes about one to three months on average to complete.