The Commonwealth Bank sold insurance for credit cards to people who couldn’t claim benefits, a senior bank executive told the Royal Commission into Financial Services.
Under questioning, Clive van Horen, the executive general manager of retail products, agreed that credit card insurance was sold to people who couldn’t claim because they didn’t have a job, including those on unemployment benefits, pensioners and students.
“We certainly failed …” said van Horen.
Earlier, a witness gave evidence that she had been pre-approved by CBA for a credit card with a $4000 limit when she was on unemployment benefits.
Irene Savidis also had credit card insurance, designed to cover card payments when the insured lost their job, even though she had not intended to take the insurance out.
CBA sold her the insurance even though she gave the bank documentation — her Centrelink income statement — showing she didn’t have a job.
The then-unemployed mother says she tried to cancel the insurance multiple times without success.
“They kept telling me it’s important I didn’t cancel because it was good for me, if something happened to me it would help me,” she told the royal commission.
Shen she did eventually succeeded in cancelling the insurance she was offered a refund of $88.73.
Earlier this month, the Commonwealth Bank announced the axing of the Credit Card Plus and Personal Loan Protection insurance products.
Up to 140,000 customers would be refunded $26 million.