Travis Schultz is warning consumers to scrub up on their insurance policy after the Australian Competition and Consumer Commission (ACCC) filed a claim in the Federal Court accusing Medibank of making false representations to its members and breaching consumer law.
The prominent compensation lawyer and Principal of Travis Schultz Law said many people have blindly trusted, yet they have allegedly been misled by the very people who should have been looking after them in the first place.
“Our large insurers can and should do better to ensure this does not happen,” Mr Schultz said.
“They are the heavyweights in the industry and they have a duty to fulfil their contractual obligations to people who put their trust in them.”
The ACCC is alleging Medibank made misrepresentations in relation to ahm ‘lite’ policies from February 2013 to July 2018 and ahm ‘boost’ polices from February 2017 to July 2018.
“We will allege that Medibank incorrectly rejected claims or eligibility enquiries from over 800 members for benefits that they were entitled to and were paying for,” ACCC Chair Rod Sims said.
“As part of our case, we estimate about 60 members needlessly upgraded their policies so they could access the joint investigation and reconstruction procedures they were already entitled to under their existing, cheaper insurance policies.
“Medibank’s alleged misrepresentations had serious consequences for members requiring procedures including spinal surgery, pelvic surgery, hip surgery and knee reconstructions, which often cost thousands of dollars.”
A Product Disclosure Statement (PDS) is a crucial tool consumers can utilise and is required to be written in plain English to make it easy for people to understand when and how they can make a claim and what it covers.
Mr Schultz said when consumers take out any sort of insurance, they are provided with a contract which details what they are covered for and what they are not.
“In this instance, it is not what was written in the policy that was the issue, it was that Medibank was allegedly not allowing people to claim for certain procedures, or wrongly told their customers that they needed to upgrade their policy or proceed without being covered,” Mr Schultz said.
“Thankfully, Medibank was recently made aware of the problem by savvy consumers; a problem which turned out to be a “coding error” on two types of policies and Medibank reported themselves to the ACCC before the news broke and worked on compensating people.
“When you take out a contract for any insurance, remember to put the contract in a safe place and refer to it if and when you need to make a claim.
“If what you are being told seems to contradict what is in the policy, take the time to speak to the appropriate person within your insurance company or ask someone with an understanding of contract law to read it for you and provide advice.
“If you’re not satisfied with the response from a health insurer, a complaint can be lodged with the Private Health Insurance Ombudsman and if the concern is with another type of insurance policy, a complaint can be pursued with the Australian Financial Complaints Authority,” Mr Schultz said.