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The major brokerage is embroiled in a new class action investigation led by Shine Lawyers.
Shine Lawyers has launched a class action investigation on behalf of tens of thousands of home owners who were sold a policy by Aussie Home Loans, which was ultimately of limited or low value.
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The policy was advertised as a type of life insurance that would help cover home loan repayments in the event of illness, loss of employment or death.
However, Shine alleges it was unnecessary, given many customers may have already had similar and better coverage, or because there were other policies available that were cheaper and provided substantially better coverage.
The class action investigation will examine whether the brokers owed a duty of care to act in their client’s best interests, whether that duty was breached, and whether their sale of the product was misleading or deceptive, or amounted to unconscionable conduct. Anybody who bought a mortgage protection policy from Aussie Home Loans from September 2016 onwards may be eligible for the potential class action.
Class actions practice leader Rebecca Jancauskas said it was often first home buyers who were forced to hand over an extra thousand dollars or more a year to pay for the policies.
“It’s hard enough to get a foot on the property ladder, and if brokers are selling unnecessary insurance, it makes it even harder,” she said.
“Buying a home is a complex and stressful process. We’re investigating whether Aussie Home Loans exploited its clients by selling them a policy that was essentially worthless.”
Aussie hits back
Aussie and ALI Group have responded to news that Shine Lawyers are investigating a class action against the major brokerage, with ALI CEO Huy Truong describing the allegations about the worth of the policies as "baseless".
“Both Aussie and ALI Group are considering our options in relation to these allegations,” he said.
“To date, $147.8m have been paid to policy holders who have suffered from loss of employment, accidents, serious illness or worse. Many of these claimants have subsequently shares heartfelt gratitude to ALI and the mortgage broker who offered the policy. We expect to pay many more claims in the future as life events continue to impact our policy holders.”
An Aussie spokesperson said the group had not received "any legal correspondence relating to these particular claims."
[Related: Industry heavyweights hit back at class action]
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