Consumer credit insurance (CCI) remediation payments driven by the corporate regulator’s investigations into junk products are set to top $160 million.

The Australian Securities and Investments Commission (ASIC) says a final tranche of the remediation program will exceed $32 million, with payments going to more than 122,000 customers. That adds to around $128 million paid to more than 312,000 consumers.

ASIC Deputy Chairman Karen Chester says it’s unfair to consumers and ultimately costly to business to sell junk insurance, and the regulator’s work has ensured remediation programs are robust.

“There’s nothing fair about selling on-going consumer credit insurance to a 65-year-old when eligibility falls away at 66,” she said. “There is nothing fair about selling insurance with involuntary unemployment cover to an unemployed worker.

“These sales practices were systemic, and through ASIC’s work hundreds of thousands of consumers like these ones have been compensated.”

ASIC says it is continuing to investigate the suspected misconduct of several entities involved in the CCI product market, with a view to taking enforcement action.

The regulator last July ordered 11 banks and lenders providing CCI to undertake a large-scale remediation program and also said product manufacturers needed to redesign their offering.

Since then all the lenders in the review are now no longer selling CCI with credit cards, personal loans or home loans, but hundreds of thousands of existing consumers continue to hold policies and pay premiums.

“Importantly, the forthcoming design and distribution obligations will mean that junk insurance like this will not reach consumers,” Ms Chester said.

The Consumer Action Law Centre has welcomed the latest remediation payments but says it estimates Australians were sold more than $1 billion worth of junk insurance over the past 10 years.

CEO Gerard Brody says it’s a concern that ASIC has delayed the start date of the design and distribution laws for six months to October 5 next year, given the rules have been on the agenda for more than five years and Federal Parliament has passed legislation.

He also criticised a delay in cracking down on junk insurance and warranties sold in car yards, following the end of an ASIC consultation last year.

“We call on ASIC to take further steps to prevent these harmful junk insurance sales happening in future,” he said.