In one of the largest court-ordered notices in the nation's legal history, more than 400,000 Australians were today notified they may be eligible for a class action accusing National Australia Bank (NAB) of selling “junk” consumer credit insurance (CCI).

Slater and Gordon says at least one in every 50 adult Australians will receive advice of the “insurance rip-off”. The law firm alleges NAB sold insurance for credit cards and personal loans which was of little or no value.

“NAB knows that using pushy tactics and pressuring vulnerable customers into buying worthless insurance was wrong. They did it anyway, and collected millions of dollars in unwarranted premiums in the process,” says Practice Group Leader Andrew Paull.

The class action proceedings were filed in the Federal Court in September on behalf of customers who Slater and Gordon say were inappropriately sold credit card insurance by NAB and MLC. In June, the court agreed the claim could be expanded to include personal loan insurance.

Today’s mass notification comes two days after Allianz revealed it has dropped all its CCI business. The Australian Securities and Investments Commission issued a damning assessment of the product last month, outlining unacceptable sales practices and poor design in the CCI sold by major lenders which it said “consistently failed consumers”.

Now, Slater and Gordon wants Australians who held CCI with financial institutions other than NAB to register interest in their own class action.

The NAB claim, issued on the back of the Hayne royal commission and run on a no win no fee basis, alleges the lender engaged in unconscionable, misleading and deceptive conduct. NAB and MLC sold CCI to persons who were ineligible to claim under the terms of the policy, it alleges, or were otherwise highly unlikely to benefit. Misleading and deceptive conduct is alleged in relation to the way CCI was sold, for example some customers were not informed it was optional.

“We are here for our customers and encourage them to contact NAB directly if they have any questions in relation to their CCI policies,” a NAB spokesman told insuranceNEWS.com.au. “As the matter is now before the court, we are unable to comment further on the class action.”

Australians who paid premiums for NAB Credit Card Cover since September 26, 2012 and/or paid premium for NAB Personal Loan Cover since June 14, 2013, and meet certain criteria, are eligible to join the class action.