ASIC sues RACQ for misleading customers: Are you due a refund?
RACQ has been accused by ASIC of sending more than 500,000 renewal documents with misleading comparison prices.
ASIC believes that between September 2019 and December 2024, RACQ issued documents where the 'last period premium' was higher than what customers paid after negotiating a lower premium or altering their policy in a way that would affect their premium.
This resulted in a distorted view of how much a customer's premium had actually increased.
"RACQ didn't just make it difficult to compare apples with apples, we consider customers were potentially left paying more because their insurance renewal documents gave them a distorted picture of the change in their premium," said ASIC Deputy Chair, Sarah Court.
"Customers should be able to look at renewal documents sent by their insurer and take them at face value."
In one instance, a customer received a renewal notice for $7,033.57 when their premium from the previous year was $6,930.55, a 1.5% increase.
In reality, the customer had paid a much lower premium in the previous year ($5,024.18), which meant the insurer had actually increased their premium by almost 40%.
ASIC alleged the misleading premium renewal appeared across several products, including home and contents, car, caravan, boat and pet insurance.
"Not only do we allege RACQ broke the law, but it was also put on notice by its customers, who complained that the 'last period premium' amount was misleading, yet RACQ did little about it for more than five years," Court said.
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Think your insurer made a mistake? Here's what to do
From sky high premiums to unfair claim rejections, Australians do have the right to push back on an insurer's decision. Here's where to start:
- Contact your insurer's Internal Dispute Resolution (IDR) department. Inform your insurer of the complaint and your preferred resolution. The insurer then has 30 days to review the case and issue a response.
- Lodge a dispute with the Australian Financial Complaints Authority (AFCA). If your complaint is rejected or not resolved after 30 days, you can get in touch with the AFCA. It's a free consumer complaints service which manages a range of financial complaints, like incorrectly calculated premiums. If you agree to AFCA's decision, an insurer must follow through. If you don't agree, you can take the matter to court.
- Engage with a legal professional. If you do intend to take the matter to court, it might be best to consult with a lawyer specialising in this field to ensure your rights are professionally represented.
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