Australia’s biggest bank on Wednesday said it will stop selling its Credit Card Plus and Personal Loan Protection products and contact customers who may be ineligible for payouts because of their employment status at the time they bought their policies.
CBA retail boss Matt Comyn, who will take over as chief executive on April 9, said the bank had been unable to limit the sale of policies to the right customers.
The refunds are in addition to the $10 million Commonwealth Bank last year agreed to pay back after the same credit card insurance was sold to 65,000 students and unemployed people who were ineligible to claim on it.
“While it is fundamental to the nature of insurance products that many customers who have them will not claim on them, and indeed they hope they won’t, we need to ensure that they are at least properly eligible to do so,” Mr Comyn said.
CBA said an estimated 140,000 Credit Card Plus, Personal Loan Protection and Home Loan Protection customers will receive the refunds, which include interest.
The bank will still sell the home loan insurance, while AIA — which is buying CBA’s CommInsure life insurance business — will eventually replace the other policies with new products.