Australian Securities & Investments Commission sues Auto & General over Budget Direct online insurance discount misrepresentations

The Australian Securities & Investments Commission (ASIC) has commenced Federal Court proceedings against Auto & General Services Pty Ltd, alleging misleading advertising of online discounts for Budget Direct car, home and motorbike insurance that led to customers losing promised discounts and being overcharged. ASIC alleges that between March 2020 and July 2024 Auto & General advertised discounts of up to 30% for customers who purchased policies online, with the ads viewed by millions, but around 39,000 customers lost the discount after making certain policy amendments in the first year. The average loss was nearly AUD 100 per customer, totalling AUD 3.3 million, and ASIC alleges customers were not told the discount would be removed following changes such as an address change, a change to the insured vehicle, or a change in payment frequency, even though the policy the discount originally applied to continued. The case also alleges Auto & General became aware of the issue as early as 2016 but did not fix it or inform affected customers for years; Auto & General has since paid more than AUD 3.8 million in remediation (including interest) to the affected customers. ASIC alleges contraventions of section 12DB of the ASIC Act and will seek declarations and civil penalties from the Court.