750,000 CBA customers receiving class action letters

Slater and Gordon says more than 750,000 people will today receive a Federal Court notice advising they may be eligible to be part of a consumer credit insurance class action against Commonwealth Bank.

The action alleges that many people were sold “junk” credit card and personal loan insurance that was of little or no value and that many customers would not have been eligible to make successful claims.

The firm has also commenced similar class actions against ANZ and Westpac, while a suit against NAB in 2019 secured a $49.5 million settlement.

Slater and Gordon says Commonwealth Bank had said it would provide refunds as part of a remediation program, but only a small portion of customers had been compensated, despite sale of the products ending in March 2018.

“This move to return only a small portion of its customers premiums seems to have been a tokenistic effort to protect the bank’s brand, rather than a genuine attempt to make good its past wrongdoing,” Practice Group Leader Andrew Paull said.

Consumers may be eligible to join the action if they were issued with a consumer credit insurance policy since January 1 2010, have paid a premium and have not been paid back in full.

More than two million people have now received court-ordered notices advising they may be eligible to participate in one of the four class actions, which is part of the Get Your Insurance Back campaign.

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$25M Dick Smith Holdings class action settlement approved but judge says "disappointing"

The $25 million settlement resulting from class actions launched against Dick Smith Holdings (DSHE Holdings), the entity remaining after the collapse of electronics retailer Dick Smith, and insurer Alliance, has been approved, but only a small portion will end up in the hands of shareholders.

The cases were launched after the collapse of the retailer in early 2016, along with the closure of its stores, which followed closely on from a $60 million inventory write-down revealed in late 2015.

A rebate-focused inventory buying policy was one of the main triggers of the company’s collapse, according to a subsequent creditors’ report.

It should be noted that online retailer Kogan.com purchased the Dick Smith online retail business in 2016, taking over from June that year. 

The online business is unrelated to Dick Smith Holdings, the entity at the centre of the class actions.

Two of three proceedings were brought against DSHE Holdings Ltd and Dick Smith’s then executive directors, Nick Abboud and Michael Potts, and its auditor, David White of Deloitte Touche Tohmatsu. 

The other action was brought against Allianz Australia Insurance.

Broadly, two of the proceedings were securities class actions, with the plaintiffs representing people or entities that had purchased shares in Dick Smith. 

These actions alleged misleading or deceptive conduct of Dick Smith, Abboud, Potts and Deloitte.

The proceedings settled in principle on 3 December 2020, with the settlement involving a payment by several defendants of a total amount of $25 million.

Now, Supreme Court of NSW justice James Stevenson has approved the settlement, which he described as “disappointing”.

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