Budget Direct Faces ASIC Action Over Alleged Online Discount Failures
Budget Direct allegedly overcharged insurance customers and denied online discounts, according to ASIC claims.
ASIC has started proceedings against Auto & General Services Pty Ltd, alleging sustained misconduct related to Budget Direct insurance over several years.
Between March 2020 and July 2024, Auto & General promoted discounts of up to 30% for customers purchasing car, home, or motorbike insurance policies online. During this period, these advertisements reached millions of consumers.
However, ASIC alleges that approximately 39,000 customers lost their online discount after making amendments to their policy during the first year of their individual coverage, if those changes occurred between March 2020 and July 2024. The average loss per customer was nearly $100, totalling approximately $3.3 million across all affected individuals in this timeframe.
ASIC alleges the advertising was misleading because customers were not told their discounts would be removed if they changed policy details, such as address, during sign-up or when making changes.
ASIC alleges Auto & General knew of the discount issue as early as 2016 but failed to act or inform affected customers for several years, from March 2020 to July 2024. Senior staff reportedly knew of the problem yet did not resolve it during these years.
ASIC Deputy Chair Sarah Court emphasized that the case highlights the regulator’s 2026 enforcement priority, which targets misleading pricing practices that affect the cost of living for Australians.
‘We have taken multiple cases alleging failures by insurers to deliver on their pricing promises to customers.
‘In this case, we allege Budget Direct removed discounts without notice if the customer made certain changes to their policy details, leaving tens of thousands of people out of pocket.’
ASIC contends that customers lost discounts when they changed details like address, vehicle or payment frequency, even though their policy remained active.
Australians should be able to take insurers at their word, especially when it comes to discounts that influence their decision to take up a policy and compare it to other products in the market.
‘We allege Budget Direct’s conduct was misleading and deprived tens of thousands of Australians of millions of dollars in savings they were promised,’ the Deputy Chair said.
Auto & General has since paid more than $3.8 million, including interest, in remediation to approximately 39,000 affected customers for losses incurred between March 2020 and July 2024.
ASIC will seek court declarations and civil penalties as proceedings continue.
English