Australians are unknowingly sitting on thousands of dollars worth of junk insurance refunds and have been urged to check if they are eligible as complaints about the so-called rip-off have surged.
Following a banking royal commission finding in 2019, financial institutions were ordered to set aside $10 billion to refund people who had purchased junk insurance for their credit cards or loans. Junk insurance refers to coverage that is either unnecessary or worthless.
Cost-of-living pressure and rising complaints
Australians are being squeezed by what advocates describe as a cost-of-living “triple whammy” — higher interest rates, soaring fuel prices and everyday essentials climbing sharply — yet many are unaware they may be entitled to refunds for junk insurance sold alongside loans and credit cards.
New data from the Australian Financial Complaints Authority (AFCA) has revealed complaints about junk insurance have exploded more than 1400 per cent since 2021, with 7880 complaints received in the last financial year alone.
According to Claimo, a company that assists Australians with junk insurance refunds, an estimated 4.7 million Australians were sold junk insurance since 2010, but only a fraction have come forward. The company continues to process refunds weekly, with some payouts reaching tens of thousands — and in rare cases, hundreds of thousands.
How to check for refunds
Consumers can also pursue refunds themselves for free by reviewing old loan contracts and statements for terms such as “credit card insurance”, “consumer credit insurance” or “loan protection”. Millions worth of refunds are available to Australians.
Refunds helping Australians
Victorian customer Agis Vlahos recovered $3,932 after Claimo uncovered consumer credit insurance attached to a personal loan he took out years earlier. “With the cost of living so high, it was reassuring to recover money that shouldn’t have been taken in the first place,” Vlahos said. He believes many Australians still have no idea they may be entitled to money back.
Claimo director Nathan Mortlock said many people are shocked to learn they were paying for insurance they never needed — or were ineligible to claim — and that refunds can provide meaningful relief as living costs rise. The company says checking eligibility is quick and carries no upfront cost.
Australians who have held any loan or credit product in the past 16 years — including car loans, mortgages, credit cards and personal loans — are being urged to review whether junk insurance was added without their knowledge. With billions still unclaimed, advocates warn that failing to check could mean missing out on money that was never meant to be charged in the first place.
