15 hours ago
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Tens of thousands of Budget Direct car, home, and motorbike insurance customers were overcharged, according to ASIC.
The Australian Securities and Investments Commission (ASIC) has taken Budget Direct to court for allegedly misrepresenting discounts and overcharging tens of thousands of customers.
The case has been brought to Auto & General, which underwrites Budget Direct insurance, with ASIC alleging around 39,000 customers were stung with higher costs for car, home, or motorbike policies.
ASIC states that “customers lost their online discount after making amendments to their policy during the first year”, and amounts the monetary figure to $3.3 million.
“Between March 2020 and July 2024, Auto & General advertised significant discounts of up to 30 per cent for Budget Direct customers who purchased car, home or motorbike insurance policies online with the advertisements being viewed by millions of consumers,” the release states.
“It is ASIC’s case that the advertising was misleading because customers were not told the discounts would be removed following any changes such as a change in address, either at the time they signed up, or at the time that they made the change.”
However, Auto & General has already refunded – with interest – affected customers to the sum of $3.8 million, with ASIC pursuing further financial penalties.
Auto & General has released a statement, published by ABC News, and said work is underway to prevent further incidents from occurring.
“In the past two years, Auto & General has invested more than $70 million in improvements to its systems and processes for managing its risk and compliance obligations and to prevent such an issue recurring,” it said.
“In addition, since this issue commenced, there has been a significant program of transformation to improve our culture of accountability and compliance.”
This is not the first time ASIC has taken an insurance provider to court, with the body currently in dispute with Insurance Australia Group (IAG) and QBE Insurance, while RACQ Insurance Limited was fined $10 million in 2023.
ASIC deputy chair Sarah Court said insurance should be clearer for customers.
“We have taken multiple cases alleging failures by insurers to deliver on their pricing promises to customers,” Court said in a statement.
“Australians should be able to take insurers at their word, especially when it comes to discounts that influence their decision to take up a policy and compare it to other products in the market.”
Tung Nguyen has been in the automotive journalism industry for over a decade, cutting his teeth at various publications before finding himself at Drive in 2024. With experience in news, feature, review, and advice writing, as well as video presentation skills, Tung is a do-it-all content creator. Tung’s love of cars first started as a child watching Transformers on Saturday mornings, as well as countless hours on PlayStation’s Gran Turismo, meaning his dream car is a Nissan GT-R, with a Liberty Walk widebody kit, of course.
