The financial complaints watchdog is warning victims of the recent bushfires about potentially dodgy “middle men” offering to broker quick payouts with insurance companies.
The Australian Financial Complaints Authority (AFCA) warned people to think twice before signing binding contracts.
It claims management companies have been accused of bullying tactics, cold-calling and confronting victims in person.
AFCA chief operating officer Justin Untersteiner told the ABC’s AM program middle men operating for claims management companies charged excessive fees for services that delivered little or no benefit.
“We are hearing reports of everything from door knocking, showing up at community events, through to cold calls,” Mr Untersteiner said.
The worst we are seeing is bullying tactics where these middle men are quite pushy and creating panic.
“We’re talking about people that are already vulnerable, who have experienced significant hardship, so it can be easy for them to enter an arrangement that they don’t understand.”
While the practice of claims management companies approaching individuals is not unlawful, AFCA is warning bushfire victims to think carefully before signing up to binding contracts where fees must be paid or commissions are charged.
Claims management companies generally charge a percentage of the sum recovered, which Mr Untersteiner said was of no real benefit to bushfire victims.
While AFCA has no jurisdiction over claims management companies, it has established a hotline to assist with resolving financial complaints.
“We have special processes that identify and fast-track complaints from people, primary producers and small businesses in impacted communities, so we can assist you to resolve complaints as quickly as possible,” Mr Untersteiner said.
The Insurance Council of Australia has been warning of “storm chasers” in recent years, after cases in which claims management companies and tradies have exploited natural disaster victims.