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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: "Buyer Beware of ASIC" who permit more Junk CCI and Gap Insurance to be thrust onto Consumers against their bast interests.

Posted by on in ROYAL COMMISSION URGENT
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Junk merchants fleecing millions from unknowing Australians

December 14, 2015 ReportMedia Release
 
 

The ‘Junk Merchants’ report says that Consumer Credit (CCI) and Gap Insurance sold as ‘add-ons’ to motor vehicle finance and other credit products are often rubbish products that provide little value to Australians.  Case studies in the report demonstrate that the products are often sold to people who are ineligible to claim or who don’t even know they’ve bought it due to what might be described as sneaky ‘add-on’ sales process.

 

“These products truly are junk” says Gerard Brody, CEO of Consumer Action Law Centre. “They’re poor value products that are commonly sold in a manipulative way and are getting worse. Bundling of low-value insurance with a car or other loan takes advantage of Australians. Many people don’t even realise that they’re purchasing the insurance because they’re focused on buying the main product.

 

“Consumer Credit Insurance only pays out 23 cents in the dollar—that’s less than half of what’s paid out on home insurance. Quite frankly, it’s scandalous that they’ve gotten away with it for so long. We’re calling for the insurance industry to make these products worth something or we’ll seek to have them banned,” said Mr Brody.  The report uncovers high commissions as a significant problem, including that:

 

  • Up to 65 per cent of the premiums paid for Gap Insurance goes to commissions benefiting the salesperson; and
  • CCI salespeople commonly retain one dollar in every five as a commission.

“Conflicted remuneration has contributed to scandalous practices across financial planning and life insurance, and here it is again. High commissions drive this industry”, said Mr Brody. 

 

Consumer Action’s report follows similar problems in the UK where the Payment Protection Insurance (PPI, the British equivalent of CCI) scandal led to over a million ombudsman complaints and over £22 billion in refunds. In Australia, high profile firms including Allianz, CGU, Westpac and Esanda have recently had to pay large amounts in compensation for mis-selling CCI.

 

Author of the report and Senior Policy Officer at Consumer Action, David Leermakers says Australians need to fight back.  “Many of our clients aren’t even aware they’ve bought these products, and are paying thousands of dollars for them. But Australians do have rights. We’ve helped a number of our clients successfully seek refunds and we want all Australians to have the opportunity to do the same.”

 

Media Contact: Jonathan Brown, 0413 299 567, This email address is being protected from spambots. You need JavaScript enabled to view it." target="_blank" style="color: #1155cc; vertical-align: baseline; margin: 0px;">This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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