What is Junk Insurance?
Junk Insurance is exactly what it sounds like!
The term refers to any insurance policy that wasn’t worth the money you paid for it.
Just like Junk Food can look, smell and taste very appealing but not offer any real goodness, Junk Insurance was often presented as a good idea but was expensive and offered very little benefit. Junk Insurance policies were poor value and were often capitalized into the cost of credit products, meaning people ended up paying interest for a poor value insurance product that they didn’t need, and might not have even known they were paying for.
For years, banks worldwide have raked in massive profits by peddling junk insurance to their customers. This so-called insurance often failed to deliver on its promises, leaving consumers high and dry.
While banks pocketed premiums for this subpar insurance (and sometimes even tacked on interest without disclosure!), they frequently fell short on providing actual coverage. In many cases, the insurance was unnecessary or mismatched and when payouts did occur, they were often paltry, allowing banks to reap hefty profits at their customers' expense.
The sale of this junk insurance proved to be immensely lucrative. For too long, banks evaded scrutiny.
It took the Royal Commission into the banking industry to shed light on these egregious practices and the widespread sale of junk insurance. The Commission's Report, alongside investigations by ASIC, delivered scathing indictments.
It exposed the abysmal value these policies offered consumers and chastised banks for their unethical sales tactics. The message was crystal clear: cease the sale of these harmful products.
If you have some questions, you’re probably not the first! Here are our most common Frequently Asked Questions.
If you have a question that isn’t covered here, please reach out and contact us we will be more than happy to hear from you. The easiest way to get in touch is to use the button below, or you can send us an email at: hello@fairrecovery.com.au
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Banks and insurers have made BILLIONS of dollars from selling these dodgy insurance products.
Nearly 2/5 of adults have been affected by this financial scandal.
Even if you have never heard of it before, you could be owed thousands of dollars right now! -
Junk Insurance was a form of add on insurance that was supposed to cover its customers in the event they couldn’t pay for their loan or credit agreement. However, these insurances included such harsh exclusions in the small print, paying for them was often totally pointless!
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Junk Insurance was attached to almost every singe type of credit product imaginable by different lenders over the years, however the most common types are Credit Cards, Unsecured Loans, Homeowner Loans, Store Cards, Car Finance and Hire Purchase Agreements.
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Policy costs varied dramatically based on the type and the value of the credit product they were being added onto. On average our successful customers recover around $3,000, but our single biggest refund has been for over $10,000.
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That’s where we come in: Fair Recovery will help find out if you have ever been sold any Junk Insurance, and we can help you get your money back from the people that sold it to you.
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We won’t charge you anything to find out if you’re owed any money. We operate on a No Win, No Fee basis.
If we help you get your money back, we take 33% as our fee. -
While every case we handle is different, on average it takes around 12 weeks to complete a claim, cradle to grave. This includes the time we spend investigating whether you were sold Junk Insurance and the time to review the details surrounding the sale of the insurance.
Don’t worry though, we do all the hard work and keep you updated every step of the way.
