RACQ faces court over misleading premiums in Australia

Core Points - The Australian Securities and Investments Commission (ASIC) has initiated legal action against RACQ Insurance for allegedly providing misleading premium comparisons to customers over a period of more than five years [1][4] - The misleading practices potentially distorted customers' understanding of their policy renewals, with over 570,000 renewal documents sent out containing inflated "last period premium" figures [1][2] Summary by Sections Allegations and Impact - ASIC claims that the figures presented in renewal documents did not accurately reflect discounts or policy changes, leading to a misrepresentation of actual premium increases [2] - During a cost-of-living crisis, ASIC believes that RACQ misled thousands of customers by including false comparison pricing in their renewal documents [2] Customer Complaints and Awareness - RACQ was reportedly aware of the misleading information as customer complaints arose just two days after the practice began [4] - An example highlighted a customer's renewal notice showing a 1.5% increase from $6,930.55 to $7,033.57, while the actual increase was 40% from a previous payment of $5,024.18 [3] Legal Proceedings and Company Response - ASIC is seeking court declarations, civil penalties, and publicity orders against RACQ for the alleged misleading practices [4] - In response to the allegations, RACQ acknowledged ASIC's proceedings and stated it would work through the legal process to resolve the matter [5] - Insurance Australia Group recently completed the acquisition of RACQ's insurance underwriting business [5]