Colonial First State hit with class action over alleged excessive insurance premiums
Written on the 23 January 2020 by Business News Australia
Commonwealth Bank (ASX: CBA) subsidiary Colonial First State is now facing its third class action lawsuit as Shine Lawyers follows in the footsteps of Maurice Blackburn and Slater & Gordon.
The law firm alleges customers were slugged excessive insurance premiums.
Shine alleges on behalf of "thousands of Australians" that Colonial First State tipped its members into policies with the bank's insurance arm CommInsure despite there being substantially similar or better policies with cheaper premiums through other providers.
"These customers were forced to pay more for life insurance as well as total and permanent disability insurance, and this has eaten into their superannuation," says Shine Lawyers' class actions practice leader Rebecca Jancauskas.
"Many of these people are approaching retirement and now their nest egg has shrunk as a result of the conduct of Colonial First State Investments Limited."
Jancauskas alleges the bank was motivated by self-interest, rather than working in the best interests of clients and customers.
"This appears to have been a mutually beneficial arrangement that had the effect of putting profits ahead of people."
The class action, filed in the Federal Court of Victoria, is open to members of FirstChoice Pension Super and Pension, First Choice Wholesale Personal Super and Pension, FirstChoice Employer Super, and Commonwealth Essential Super.
Shine Lawyers' class action follows two separate class actions against Colonial First State launched in October 2019.
Maurice Blackburn's class action focuses on alleged breaches of super trustee duties that the firm says have caused substantial losses to more than 100,000 members over several years.
The case will centre on Colonial's failure to transition $3.2 billion of accrued default amounts (ADAs) over to the lower-cost, higher-performing MySuper product in a timely way and in the best interests of superannuation fund members.
On the same day in October Slater & Gordon (ASX: SGH) also launched its own class action law suit against Colonial First State, alleging the company charged excessive superannuation fees to fund ongoing commissions paid by Colonial First State to financial advisers.
Business News Australia
Author: Business News Australia