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Desjardins may face two class action suits

By Alain Thériault | January 23 2019 11:30AM

Desjardins Group will soon find out if it has to defend itself against two class action suits, in two separate cases filed in spring 2018 by Option consommateurs.

The Superior Court, District of Montreal, is presently deliberating over whether or not it will allow the cases. Both cases accuse Desjardins of imposing insurance on clients without their consent. The AMF previously sanctioned the cooperative for these two breaches in 2017. The Court also ruled on these two points of law pertaining to the two class action suits.

Student loan program

According to a summary of the first lawsuit published by the law firm Charbonneau Avocats Conseils, Option consommateurs filed a motion for authorization to institute a class action suit against Desjardins Financial Security (DFS) and the Fédération des caisses Desjardins. As part of a loan program, the two Desjardins Group entities allegedly obliged students to purchase insurance to guarantee the repayment of the loan, without obtaining the students’ consent.

In a ruling handed down by Judge Thomas Davis, Option consommateurs alleges that Desjardins perpetrated a scheme whereby it automatically and systematically enrolled the customers in group life, health and job loss insurance (loan insurance). The judgment states that this insurance supplements the students’ loan repayment terms without their being able to refuse it.

Added cancer coverage

Another summary by the same law firm concerns the second lawsuit, related to a DFS group insurance program. Option consommateurs and the representative of the group allege that the insurer obliged group insurance subscribers to purchase cancer protection coverage, in addition its Savings-Life Insurance product, whereas they did not agree to purchase this form of critical illness insurance. 

The judgment states that the problem raised by Option consommateurs in this case occurred around April 2016. At that time, DFS sent the members of the insured group a letter informing them that it was adding new coverage to their group life insurance, namely cancer protection. Specifically, the cancer coverage would be automatically added to members’ Savings-Life Insurance. Option consommateurs accused the insurer of automatically and systematically adding cancer coverage without giving the group members an opportunity to decline it, and without providing a prior explanation about the product.

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