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Consumer Credit Insurance Decision: AFCA Rules Against Refund Request

Consumer Credit Insurance Decision: AFCA Rules Against Refund Request

Consumer Credit Insurance Decision: AFCA Rules Against Refund Request?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

An Australian man seeking a refund on his paid premium for consumer credit insurance (CCI) has been denied by the Australian Financial Complaints Authority (AFCA).
The man argued the insurance was mis-sold to him, claiming he was led to believe the coverage was essential when he acquired it with his credit card in 2015.

In contrast, AFCA found no evidence to support these claims, affirming that the insurance was offered as an optional add-on during an online purchase process. The consumer decided to stop the policy in April of the previous year upon realizing that other loans he held did not have similar coverage.

He demanded a refund of $3612 for the premiums paid, asserting that Latitude Finance, the product supplier, exploited his lack of understanding of the insurance's necessity. Latitude Finance maintained that the insurance option was transparently indicated as voluntary, emphasising the man's online purchase rather than through a direct bank interaction.

The complainant argued the optional insurance was misleadingly shown as a necessary part of the credit card application process. Despite this, AFCA highlighted inconsistencies in the complainant's statements and determined that the purchase evidence illustrated a conscious decision to opt for the insurance coverage after receiving adequate information about its nature and terms.

According to AFCA, the man was given sufficient time to comprehend the policy details and chose to add the coverage voluntarily, contradicting his claims of misunderstanding its non-compulsory nature. The decision reaffirms AFCA's stance on ensuring that financial product disclosures are clear, allowing consumers to make informed decisions.

While the ruling concludes this specific complaint, it serves as a broader reminder for consumers to carefully evaluate add-ons when purchasing financial products, ensuring they understand all contractual obligations and options available before finalising agreements.

Published:Tuesday, 4th Nov 2025
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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