The Australian Securities and Investments Commission (ASIC) has launched Federal Court proceedings against Auto & General Services, the insurer that arranges Budget Direct insurance products, alleging misleading representations about online discounts.
ASIC claims that between March 2020 and July 2024, Auto & General advertised discounts of up to 30% for customers who purchased car, home or motorbike insurance policies online. The advertisements were viewed by millions of consumers.
According to ASIC, approximately 39,000 customers lost their online discount after making changes to their policies within the first year, such as updating their address, changing their vehicle or altering their premium payment frequency. The average loss per customer was nearly $100, with the total impact across the cohort estimated at $3.3 million.
ASIC alleges customers were not told the discount would be removed if they amended their policy, either at the time of purchase or when changes were made.
The regulator further alleges Auto & General became aware of the issue as early as 2016 but failed to fix it or inform affected customers for several years. It claims senior staff were aware of the problem but did not immediately address it.
ASIC Deputy Chair Sarah Court said the case reflects ASIC’s 2026 enforcement priority targeting misleading pricing practices affecting cost-of-living pressures.
“We have taken multiple cases alleging failures by insurers to deliver on their pricing promises to customers,” Court said.