The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against Auto and General, the underwriter for Budget Direct, under allegations that they overcharged tens of thousands of customers by misleading them about their online discounts. According to ASIC, between March 2020 and July 2024, approximately 39,000 consumers lost a total of more than $3 million due to this misconduct, with the average customer's loss amounting to about $100.

ASIC's claims suggest that Budget Direct did not adequately inform customers that their promised online discounts would disappear if they made amendments to their insurance policies, such as changing their address. This has led to a significant number of affected customers facing unexpected increases in their insurance premiums. ASIC Deputy Chair Sarah Court stated that the company's conduct was misleading and that customers were not fully educated about the implications of their policy amendments.

The case highlights potential regulatory failures in protecting consumers from corporate misconduct in the insurance sector, raising questions about the transparency and fairness of the pricing policies employed by auto insurers. If proven, this legal action could have broader implications on how insurance companies advertise and communicate their discount structures, aiming to protect consumers from future misunderstandings and financial losses.