The AFCA junk insurance deadline -- Australia's Billion-Dollar Consumer Scandal
www.claimo.com.au
Key Facts:• Up to 5.1 million Australians may be locked out of billions in junk insurance refunds due to AFCA’s 30 June 2025 deadline.
• Mis-sold insurance products included Consumer Credit Insurance (CCI) and other add-on policies, with banks historically returning as little as 11 pence in the pound.
• Refund success rates collapsed after the deadline — falling from 71.81% pre-deadline to just 20.49% post-deadline.
• An estimated £19 billion in refunds may be owed across 11 million CCI policies sold since 1992.
• Nearly 1 million add-on insurance policies were sold through car dealerships between 2013–15.
• Consumers were never properly informed about AFCA’s deadline, leading to calls for ASIC intervention and the removal of the cut-off date.
FOR IMMEDIATE RELEASE:
Australia’s cost-of-living crisis has deepened, with fresh data showing that millions of consumers may be locked out of billions of dollars in junk insurance refunds following the little-known Australian Financial Complaints Authority’s (AFCA) 30 June 2025 deadline.
Time to act ahead of 30 June deadline for older ‘add-on’ insurance or CCI complaints
Millions potentially locked out
New analysis indicates up to 5.1 million Australians may have been cut off from refunds on mis-sold Consumer Credit Insurance (CCI) and other add-on insurance products — despite never being told their rights would expire.
These policies were exposed during the Banking Royal Commission for widespread misconduct. They were routinely bundled with credit cards, personal loans, home loans, car loans and novated leases, often sold using underhanded tactics — including telling consumers the insurance was mandatory, selling it to people ineligible due to casual employment, or adding it despite existing cover.
Since the 1990s, major banks and insurers have collected billions while paying out as little as 11 cents in the dollar, leaving consumers with products regulators later deemed effectively worthless. Claimo frequently sees cases where interest on premiums exceeds the premium itself — including a customer who paid $21,000 but received more than $90,000 once interest was included by the Ombudsman.
Industry-wide data shows:
- 11 million CCI policies sold since 1992
- Nearly 1 million add-on insurance policies sold in car dealerships between 2013–15
- 5.1 million Australians potentially mis-sold
- An estimated $19 billion in refunds may be owed
Were financial firms “running down the clock”?
Claimo has received multiple communications from financial institutions stating they would no longer investigate cases due to AFCA’s deadline - meaning consumers automatically lose their right to lodge complaints and have nowhere else to go.
Nathan Mortlock, Managing Director of Claimo, said:
“AFCA’s deadline has effectively shut out a generation of Australians who were mis-sold insurance they never needed during a cost-of-living crisis. These customers were never told their rights would expire on 30 June.”
Our data shows millions of consumers may have been impacted, and billions of dollars in refunds remain unpaid. At a time when families are choosing between groceries, fuel and rent, withholding legitimate refunds is unconscionable. ASIC must intervene.
Refunds collapsed from millions per month to almost nothing overnight. It’s clear the deadline has created an industry-wide shutdown”
Calls for ASIC intervention grow
AFCA initially tried to enforce a 4 February 2025 deadline, arguing consumers “should have known” they were mis-sold insurance six years after the Royal Commission’s final report. After Claimo raised concerns with ASIC, the regulator intervened and forced AFCA to extend the deadline to 30 June 2025 — but only after a last-minute, low-reach public awareness campaign.
Mortlock added:
“Most Australians still have no idea this deadline exists. If AFCA had to extend it once because the public wasn’t properly informed, then the deadline should be removed altogether.
It’s a cop-out to say the Royal Commission ‘put consumers on notice’. Ordinary Australians were never told their refund rights would suddenly expire. AFCA’s decision is actively harming the very people it was created to protect. This is behaviour we expect from banks — not from the independent body meant to safeguard consumers from the conduct they’re complaining about.”
ASIC has stated it respects AFCA’s independence on the deadline, but Claimo says the law is clear: ASIC can intervene when an ombudsman scheme becomes inaccessible. The new data shows the deadline has created exactly that scenario.
New data reveals the collapse after AFCA’s deadline
Three key periods show the dramatic shift in junk insurance complaint outcomes.
- Pre-Deadline (1 August 2024 – 3 February 2025)
This is the period leading up to AFCA’s original 4 February deadline.
During this time, 4,491 cases were lodged and 3,225 refunded, a 71.81% success rate, returning $8,447,553 to consumers.
• $3.9 million via Internal Dispute Resolution (IDR) Refunds
• $4.5 million via External Dispute Resolution (EDR) Refunds through AFCA
📊 Strong performance across both IDR and AFCA. A fully functioning system.
- Extension Window (4 February 2025– 30 June 2025)
This is the official extension period created following Claimo + ASIC intervention.
During this time, 8,486 complaints were lodged and 5,164 refunded, a 60.85% success rate, returning $12,400,000 to consumers:
• $7.2 million via IDR
• $5.2 million via AFCA
📈 High engagement and strong outcomes despite mounting pressure. Refund delivery remained robust.
- Post-Deadline (1 July 2025 – 23 November 2025)
This is the period after the final AFCA deadline, where refunds collapsed and resolution rates plunged to their lowest level on record
During this time, 1,654 complaints were lodged and 339 refunded, a 20.49% success rate, returning $1,005,603 to consumers.
• IDR refunds: $932,603
• AFCA refunds: $73,000
📉 Refund activity collapsed, AFCA resolutions dropped to near zero, and consumers have lost up to $2.1 million in refunds - purely because the system broke down after AFCA’s deadline.
Defending the indefensible
AFCA claims the blanket deadline is justified because consumers were ‘on notice’ after the Royal Commission. But Australians were never told their refund rights would expire, and AFCA has never applied a similar cut-off in any other area of complaints. If consumers had been properly informed, they would have come forward earlier.
Australians who beat the 30 June deadline
Jeanette – Sunshine Coast
“I remembered paying mortgage insurance in 2010. I used to be a lecturer in fraud and forensic accounting and spoke to students about how banks rip people off. I had a few loans so provided details and ANZ had detailed the issues. Then I was guided by Claimo. AFCA requested further information which I provided.
At the time I had death and disability insurance through super so I was double insured. I was a single mum at the time. I got much more than what I paid – because it caused me lots of financial hardship. I requested net present value and for the hardship. I ended up receiving 3–4 times what I paid.”
Australians locked out by the 30 June deadline
Marko – Sunshine Coast QLD
“If my mate hadn’t mentioned it, I’d have had no idea I’d been paying for junk insurance. When I realised I’d spent $5,707.69 on something that gave me nothing in return, it really stung.
With the cost of living what it is, that kind of money means bills, groceries, fuel – real life stuff. I absolutely believe I should still have access to that refund. I paid those premiums like everyone else.
Missing some quiet deadline doesn’t make it fair. Finding out I was locked out just because I asked after an arbitrary date felt like being ripped off twice. The deadline is unfair because the public were never told. You can’t start a race and then blame people for not running when they didn’t even know it was on. All it’s done is protect insurers, not the people who got sold junk in the first place.”
About us:
About Claimo
Claimo is an Australian consumer advocacy service that helps people recover refunds for mis-sold junk insurance, credit card insurance, add-on loan insurance and other financial harm. Claimo operates on a no-win, no-fee model and has helped tens of thousands of Australians reclaim tens of million in compensation from banks, lenders and insurers for mis-sold junk insurance policies. The company specialises in identifying mis-sold products, preparing submissions, and navigating Internal Dispute Resolution and AFCA processes on behalf of consumers.
Contact details:
Media Contact
Contact: Nikola Araouzou, Co-CEO – Claimo
M: 0422 857 513
E: [email protected]