Understanding the law


You might be entitled to a refund for the money you paid for your junk insurance or rubbish warranty. This will depend on your circumstances.

The DemandARefund.com Form will help you figure out some of these arguments.  It’ll help you generate complaint letters.

You can improve your letter by better understanding the legal arguments.  It might also help you if the financial services provider refuses to give you a refund and you need to take the dispute to an independent complaints body (such as the Australian Financial Complaints Authority).

There may be other arguments available to you.  Make sure all of your concerns are explained in your complaint letter.

What are some of the legal arguments?

[expand title=”Unconscionable conduct”]

Unconscionable conduct is seen as conduct that is so harsh it goes against good conscience. For example, this could be unfairly pressuring you to buy a product.

In 2014, a Court decided that selling Consumer Credit Insurance (CCI) to people who were unlikely to receive a benefit was unconscionable: see ASIC 14-220MR Payday lender engages in unconscionable conduct and breaches consumer credit laws

Find out more about unconscionable conduct generally on the Australian Competition and Consumer Commission website.


[expand title=”Misleading and deceptive conduct”]

Businesses are not allowed to make statements that are wrong or likely to give you the wrong impression about what you’re buying. A business might mislead you by making you think something is better than it is or not telling you something important that would change your mind.

If you rely on what the salesperson says and buy insurance/or a warranty as a result, you might be entitled to a refund.

One example we’ve seen is people being told they must buy Consumer Credit Insurance to get a loan. This is not true and could also be a breach of the National Credit Code.

Read more about misleading and deceptive conduct generally on the Australian Competition and Consumer Commission website.


[expand title=”Failure to provide Product Disclosure Statement (PDS)”]

It’s a legal requirement that the financial services provider or salesperson provides you with a copy of the Product Disclosure Statement.  A PDS is a document/s that has information about a financial product including any significant benefits and risks.


[expand title=”Breach of General Insurance Code of Practice (applies to insurers only)”]

The General Insurance Code of Practice sets out the standards general insurers must meet when providing services to you, such as being open, fair and honest.

Read more about the General Insurance Code of Practice on their website.


[expand title=”Responsible lending (applies to finance provider)”]

“Responsible lending” is a legal term that tells finance providers how to act when they give you a loan or credit card. They might breach these requirements if:

  • They don’t ask if you require the premium or cost to be added to the credit
  • They don’t ask if you understand that interest will apply
  • Paying for the product wasn’t what you wanted or needed.

Read more about responsible lending in ASIC’s Regulatory Guide 209.


[expand title=”National Credit Code (applies to finance provider)”]

A finance company or bank can’t force you to take out Gap Insurance or Consumer Credit Insurance.  Also, they can’t force you  to take out insurance with a particular company.


Time limits

Remember there might be a time limit to your complaint, so try to make the claim as soon as possible.

Proving your loss

To prove a claim, you have to show you suffered ‘loss’ as a result of their behaviour.

For example, if the car dealer unfairly pressured you to take out a warranty, you need to show that you bought the warranty because of that pressure. The loss you suffered is then the cost of the warranty and interest.

In some cases you won’t be entitled to a refund of the full amount.

This fact sheet is for information purposes only and should not be relied upon as legal advice.  This was updated on September 11, 2018.

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