ASIC takes RACQ to court over misleading insurance renewal comparisons
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The news: The corporate regulator has claimed that one of Queensland's largest insurers, RACQ Insurance Limited (RACQ), sent thousands of customers over half a million renewal documents with misleading comparison pricing for more than five years despite customer complaints.
The numbers: In new proceedings commenced in the Federal Court, the Australian Securities and Investments Commission (ASIC) alleges that between September 2019 and December 2024, RACQ sent more than 570,000 renewal documents to customers containing representations about a ‘last period premium’ amount that ASIC alleges were false or misleading.
For example, an RACQ customer received a renewal notice showing their ‘last period premium’ was $6,930.55 and their new premium was $7,033.57: a 1.5% increase. However, the customer had actually paid a much lower $5,024.18 premium, which meant RACQ was hiking their renewal premium by 40%.
The context: ASIC claims that in many cases the ‘last period premium’ amount was higher than what customers had paid or were paying after negotiating discounts or making a change to their policy that affected the premium, leading to a distorted view of how much their premium was actually increasing.
ASIC alleges RACQ knew the ‘last period premium’ in its renewal documents was misleading customers because the insurer started receiving complaints just two days after commencing the practice.
The regulator will seek declarations, civil penalties and publicity orders from the court.
What they said: "During a cost-of-living crisis, we believe RACQ misled thousands of customers by including false comparison pricing in their renewal documents," said ASIC deputy chair Sarah Court.
"RACQ didn’t just make it difficult to compare apples with apples, we consider customers were potentially left paying more because their insurance renewal documents gave them a distorted picture of the change in their premium."
"...Not only do we allege RACQ broke the law, but it was also put on notice by its customers, who complained that the ‘last period premium’ amount was misleading, yet RACQ did little about it for more than five years."
The source: ASIC media release
