Bupa Hit With $35 Million Penalty for Unconscionable Conduct: What Businesses Need to Know

Based on an ACCC Media Release. Bane Legal Services is not a law firm and does not provide legal advice.

Bupa misled thousands of members about their health insurance entitlements, according to ACCC findings.

The Federal Court has ordered Bupa HI Pty Ltd (Bupa) to pay $35 million in penalties after finding the insurer engaged in unconscionable conduct and made false or misleading representations to its members, hospitals and medical providers.

This blog is based on the ACCC’s media release (11 December 2025). The ACCC is the original source of all findings, declarations and quotations referenced below.

As always, Bane Legal Services does not provide legal advice. We are Australia’s trusted commercial legal matchmaker, connecting businesses with the right specialist lawyers using more than 30 years of commercial experience.

What the Federal Court Found

According to the ACCC, Bupa misled members about their private health insurance entitlements between May 2018 and August 2023 by stating that certain claims were not eligible for benefits, even when the treatment was covered under the member’s policy.

The Court also found Bupa engaged in unconscionable conduct between June 2020 and February 2021, particularly in relation to incorrectly assessed Mixed Coverage Claims.

Mixed Coverage Claims occur when a hospital admission involves multiple procedures, with some covered and some not covered under the policy. Instead of assessing each component correctly, Bupa rejected many claims in full.

The result:

• Thousands of affected consumers

• Improperly denied benefits

• Some members cancelling or delaying necessary medical treatment

• Hospitals and medical providers missing entitlements

The ACCC described the conduct as “extremely serious” and emphasised that unconscionable conduct is among the gravest forms of misconduct under the Australian Consumer Law.

Impact on Consumers and Providers

The ACCC noted that some members experienced:

• Significant financial harm

• Delayed or avoided essential treatment

• Pain, suffering and emotional distress

Providers and hospitals were also affected, in some cases missing payments altogether due to Bupa’s incorrect claim assessments.

Given the rising cost of private health insurance and the essential nature of healthcare coverage, the ACCC stressed that consumers are entitled to rely on insurers to correctly assess claims in accordance with policy terms.

Penalties and Court Orders

In addition to the $35 million penalty, the Court imposed:

• A five-year injunction restraining Bupa from repeating the conduct

• Court-enforceable obligations to complete a remediation program

Bupa cooperated with the ACCC during the investigation and jointly submitted the proposed orders.

Remediation Program: Compensation Already Underway

Bupa commenced remediation prior to the court proceedings and has already paid more than $14.3 million across 4,100 affected claims.

The Court-enforceable undertaking requires Bupa to compensate impacted members, hospitals and medical providers for:

• The benefits they should have received under their policy

• Plus interest

Consumers who believe they may have been affected are encouraged to contact Bupa using contact details sourced independently, or to complete Bupa’s remediation form.

A Scam Warning from the ACCC

Importantly, the ACCC has issued a strong warning about scammers impersonating organisations offering “compensation claims assistance.”

Businesses and consumers should:

STOP – Don’t provide personal or financial information.

CHECK – Verify the legitimacy of contact using independently sourced details.

PROTECT – Contact your bank if money is lost and report scams at Scamwatch.gov.au.

Why This Case Matters for Australian Businesses

For insurers, franchisors, and any business with consumer-facing obligations, this case reinforces key lessons:

• Misrepresentations about entitlements or contract terms can constitute misleading or deceptive conduct.

• Incorrect claim or benefit assessments can create systemic risk under Australian Consumer Law.

• Unconscionable conduct findings attract significant financial penalties and reputational damage.

These issues are particularly relevant across franchising, membership-based services, subscription models and any industry with complex customer entitlements.

If your business needs legal assistance regarding compliance, claims processes, or consumer law risks, Bane Legal Services can connect you with a specialist commercial lawyer.

Background: Bupa and the Claims in Question

Bupa is Australia’s second-largest private health insurer, holding approximately 25.5% market share and serving around 4.5 million members.

The misconduct related to two categories of claims:

• Mixed Coverage Claims – treatment partly covered and partly not covered.

• Uncategorised Item Claims – treatments not assigned to a recognised clinical category in Bupa’s system.

The ACCC commenced proceedings on 30 June 2025.

Need Legal Guidance?

Bane Legal Services is not a law firm and does not give legal advice.

However, if your business requires expert commercial, consumer or insurance law assistance, we can pair you with the right lawyer based on precise industry experience and your commercial priorities.