ASIC Sues RACQ Over Alleged Misleading Insurance Premium Increases
The Royal Automobile Club of Queensland (RACQ) is facing legal action from the Australian Securities and Investments Commission (ASIC) over allegations of misleading customers about insurance premium increases. ASIC alleges that RACQ Insurance has been inflating premium comparisons for over five years, affecting hundreds of thousands of customers.
ASIC contends that RACQ Insurance misled customers by using inflated figures in renewal notices that did not reflect actual discounts or policy changes. This practice, which began in 2019, continued until recently, with over 570,000 renewal documents sent out with false 'last period premium' figures. ASIC believes this conduct potentially distorted customers' perceptions of their policy renewals.
One RACQ customer, for instance, experienced a 40% premium increase, but their renewal notice indicated only a 1.5% rise. ASIC deputy chair Sarah Court has stated that RACQ's conduct was illegal and harmful, especially during the current cost-of-living crisis.
ASIC is now seeking court declarations, civil penalties, and publicity orders in response to RACQ's actions. The alleged conduct affected various types of insurance, including home, car, caravan, boat, and pet cover. RACQ has acknowledged ASIC's proceedings and stated it would work through the process to finalize the matter. The name of the board member alleged to have provided the misleading premium comparisons has not been publicly disclosed.
