Shine Lawyers this week filed the action in the Federal Court, alleging that Colonial First State Investments Limited “tipped its members into policies with the bank’s insurance arm CommInsure”, a move they claim was not in their customers’ best interests. Colonial First State Investments Limited is the superannuation provider to the country’s largest bank, the Commonwealth Bank.
“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,” Shine’s Class Actions Practice Leader Rebecca Jancauskas said.
“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.”
Ms Jancauskas said applying the insurance policies to the customers’ accounts was “not in their best interests as substantially similar or better policies with cheaper premiums were available through other providers”.
“This appears to have been a mutually beneficial arrangement that had the effect of putting profits ahead of people,” she said.
A Colonial First State spokesperson said that the company was “reviewing the claim and will provide an update in due course”.
One of Shine’s clients, David Stuart, said he had “spent hundreds of dollars” on the insurance as part of his super.
“I haven’t seen any money from that insurance when I tried to make a claim,” Mr Stuart told Shine. “It has taken valuable dollars out of my superannuation when I am already doing it tough. In a class action, we all have a chance at having the money we paid, back in our pockets. It doesn’t belong with the banks.”
Woodsford Litigation Funding is funding the action. Charlie Morris, the organisation’s Chief Investment Officer, said a class action “was the best way to deliver justice for those overcharged for insurance”.
“Many customers may have lost a few thousand dollars, which would not ordinarily be enough to warrant launching individual court actions,” Mr Morris said.
Shine Lawyers said the class action, filed in the Federal Court in Victoria today, was open to members of the following superannuation funds:
- FirstChoice Personal Super and Pension
- FirstChoice Wholesale Personal Super and Pension
- FirstChoice Employer Super
- Commonwealth Essential Super
Additionally, members of the above funds must have held life insurance and/or total and permanent disability insurance with CommInsure between January 2014 and January 2020.
National Australia Bank’s super trustees MLC Nominees and NULIS are also facing a class action, after Maurice Blackburn filed a lawsuit today alleging they had breached the law by failing to transfer an estimated 330,000 members into lower-cost MySuper products in a timely fashion.