In our November 2022 edition of Fundamental, we flagged reforms to
unfair contract laws aimed at providing greater protections for
consumers and small businesses entering standard form contracts.
While the reforms do not come into effect until 10 November 2023,
unfair contract terms continue to be a key focus area for ASIC.
In its first court action relating to unfair contract terms in an
insurance contract, ASIC has now commenced proceedings against
insurer Auto & General Insurance Company over an unfair
contract term contained in a PDS. In this article, lawyer Sarah
Sherman provides a summary of ASIC's allegations against Auto
& General.
BACKGROUND
Auto & General provides home and contents insurance via a
PDS offered through Budget Direct, Australia Post, ING, Catch,
Virgin, and Qantas. The PDS was published on Auto &
General's website from 1 March 2021 with approximately
1,378,000 consumers having entered insurance contracts on that
basis.
