Millions of Aussies owed junk insurance refund

Time is running out to claim your junk insurance refund, popular micro-investing app shuts down, and super fund launches new retirement bonus. Here are five things you may have missed this week.

Junk insurance: Act now or miss out on refund

Aussies are being urged to act fast as the deadline for compensation claims on mis-sold consumer credit insurance - often termed junk insurance - approaches.

The Australian Financial Complaints Authority has proposed a deadline of February 2025 for refund claims for mis-sold cover - a date that marks six years since the Banking Royal Commission found consumers were being sold these near-worthless policies (hence the name 'junk' insurance).

The policies were typically added to loans and credit cards, and include mortgage protection cover for home loans (which is very different from lenders mortgage insurance).

Junk insurance reclaim company Claimo believes many Australians are unaware they could be entitled to a refund.

"The upcoming deadline represents a critical moment for consumers to reclaim what is rightfully theirs," says Claimo CEO Nathan Mortlock.

The banking sector, which has so far set aside $10 billion for claims, anticipates a significant surge in applications as February 2025 fast approaches.

Claimo is urging consumers who had home, car and personal loans, credit cards or novated leases in the period from the late-1990s to 2019 to start the claims process.

Claimo is one of several companies that investigate junk insurance. It works on a no-win no-fee basis, and instead takes 30% of any refund.

Mortlock says some Australians have pocketed refunds of up to $90,000 on junk insurance. But he adds, "The bank's not going to call you to say they owe you money, you have to do something about it."

Micro-investing app Verve Money to close

Ethical micro-investing app - Verve Money, is shutting down, with funds to be returned to investors.

The closure reflects the ultra-competitive nature of micro-investing in Australia.

Verve Money was up against the likes of Raiz, Doough, Spaceship and Pearler - all of which allow investors to get started with very little money, just $1 in the case of Doough.

These apps also charge low fees, so a solid member base is needed to achieve commercial success.

That simply didn't happen for Verve Money, which says it was unable to achieve the scale of customer uptake needed to "offer the best value to members".

Verve Money members can expect to get their money back by 31 December 2024.

Verve Super is not impacted by the closure.

Aware Super to offer retirement bonus 

From November 18, 2024, Aware Super will join the ranks of super funds offering a retirement bonus.

This bonus is a tax-free payment that's added to super balances when Aware members transfer money from their Aware Super account over to a new Retirement Income account.

These bonuses are a way of encouraging members to stick with the same fund when they retire, and already offered by the likes of Telstra Super, Australian Retirement Trust, and Brighter Super though the payment varies between funds.

The bonus is paid out of money that super funds set aside to pay capital gains tax (CGT) on any investments sold for a profit while a member is growing their super.

The drawdown phase of super is tax-free, meaning the CGT provision is no longer needed, and the money can be handed over to a member when they transition to retirement.

Conditions apply to earn a retirement bonus, and the big bucks usually go to members with high balances.

Aware Super's maximum Retirement Bonus of $12,350 applies if you have super savings of $1.9 million. On a more modest balance of $250,000, the bonus comes to around $1625.

Borrow a stadium for a day

Need rehearsal space for your backyard band to belt out some beats? Planning a memorable proposal? Looking for a spacious birthday venue?

The solution may have come to hand.

People First Bank - the latest customer-owned (or 'mutual') bank resulting from the merger of People's Choice and Heritage Bank, is offering the chance to win exclusive use of People First Stadium for a day.

Located on the Gold Coast, the stadium has seating capacity of 27,500, and with up to $5,000 thrown in to the winner, there's no need to bring along a supersized esky.

To be in the running, head to the Heritage Bank website and explain in 25 words or less why you'd like to borrow People First Stadium.

Entries close November 13, with winners announced in December.

Scams buck stops with big companies

Banks, social media platforms and telcos are set to face eye-watering fines of up to $50 million if they don't lift their game on scam prevention.

Legislation to establish a scam prevention framework was introduced to federal parliament this week.

If passed, the new laws could see some of Australia's biggest companies face mammoth fines if they don't take reasonable steps to prevent, detect, disrupt, respond and report scams, and attempted scams, in their business.

Assistant Treasurer and Minister for Financial Services, Stephen Jones, says, "Over the last year I've spoken to thousands of Australians in cities and towns around the country. They want tough action to protect their money and their information, and these laws deliver."

The Labor government claims to have made significant inroads in reducing scams, and figures from Scamwatch back this up.

So far this year, $208 million has been lost to scams, down from $476 million in 2023 and $506 million in 2022.

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