Politics

As cost-of-living pressures continue to bite, millions of Australians may be sitting on hidden refunds worth thousands of dollars without even realising it.

New data suggests around 4.7 million Australians could be eligible for refunds linked to “junk insurance” policies sold alongside loans and credit products dating back to 2010.

The issue first came to light during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which uncovered widespread problems with the sale of unnecessary or unsuitable insurance products.

Now, with household budgets stretched and interest rates tipped to rise again, many Australians are beginning to check whether they may be owed money.

Awareness of the issue is growing rapidly. According to the Australian Financial Complaints Authority (AFCA), insurance-related complaints have surged by 1457 per cent since the 2021 financial year, with 7,880 complaints lodged in the past financial year alone.

Despite this, experts believe only a small fraction of affected Australians have come forward to investigate potential refunds.

Victorian consumer Agis Vlahos was one of those unaware he had been paying for consumer credit insurance attached to a personal loan. After investigating his past accounts, he recovered $3,932.

“With the cost of living so high, it was reassuring to recover money that shouldn’t have been taken in the first place,” Mr Vlahos said.

“A lot of people simply don’t realise they may have been paying for insurance they never needed.”

Consumer credit insurance was commonly added to personal loans, credit cards and other finance products, often without customers fully understanding the costs or whether the policy suited their circumstances.

Some policies provided little practical benefit, while others were sold to people who would have struggled to make a successful claim.

Companies such as Claimo now help consumers investigate past loans and credit products to determine whether refunds may be available. The process is generally offered on a no win, no fee basis, meaning fees only apply if a claim is successful.

Claimo Director Nathan Mortlock said many Australians are shocked to discover they may still be owed money years later.

“With cost-of-living pressures continuing to mount, these unexpected refunds can provide meaningful financial relief for households struggling with rising expenses,” Mr Mortlock said.

“Even if nothing is found, checking can give people peace of mind but many people are surprised by what they’re owed.”

National media attention has also helped shine a spotlight on the issue, with 7NEWS recently reporting cases where refunds reached tens of thousands and in some cases even hundreds of thousands of dollars.

Australians who have held loans, credit cards or other finance products over the past 16 years are being encouraged to review their records and check whether they may have been affected.

For many households facing increasing financial pressure, a forgotten refund could provide some welcome breathing room.