Consumer advocates applauded yesterday's announcement that the Commonwealth Bank of Australia will phase out two of its three main consumer credit insurance products. The decision is expected to prompt the country's three other major banks to follow suit, amid growing consumer pressure.CBA provides CCI products under its Credit Card Plus, Personal Loan Protection and Home Loan Protection brands. It has set aside A$16 million to refund an estimated 140,000 customers of the PLP and HLP products.The bank said it would retain its CCI product for home loan customers, despite the problems it had identified and the remediation program. Many of the problems with the HLP product are understood to involve technical issues, rather than mis-selling. CBA issued refunds of $586,000 to 9,600 customers of its HLP product in 2016, for example, due to errors in premium charges, not product or mis-selling issues. These issues were self-identified and reported to ASIC, the bank said in a market announcement in 2016. The approach follows a similar refund program which commenced last year for Credit Card Plus customers.The CCI problem is largely in the sales process, with banks and insurers writing policies with a limited understanding of their customers as the small size of these loans makes it difficult to justify extensive due diligence on the customer. This is compounded when policies are issued through third parties, such as car yards, as was seen ASIC's review of this sector.When it comes to home loan insurance products, banks have a much deeper understanding of their customer's financial position and employment circumstances.It is highly unlikely that a home loan customer would be sold income protection without eligible employment, for instance, as this is a fundamental part of the loan qualification process. The size of home loans and the significance of the underlying asset also makes this a valuable product to retain, according to banking sources.Gerard Brody, chief executive of the Consumer Action Law Centre, said the sale of junk insurance was now on its "deathbed" after wins in other areas, such as insurance sold at car yards. Even so, it was likely to have cost Australians more than A$1 billion of dollars over the past ten years.Consumer Action's position on "junk insurance" has been supported by the Financial Rights Legal Centre and Financial Counselling Australia."The stories we've heard have been atrocious. People tricked into buying insurance, insurance slipped into paperwork without people's knowledge and thousands of dollars being taken from families for no benefit," Brody said.In some instances, for example, customers were sold employment-related benefits that they were not entitled to receive because they were unemployed at the time.Matt Comyn, the head of retail banking at CBA and CEO-designate, said the bank had been working with consumer groups to find a solution to these issues. It is also working closely with ASIC to provide refunds to customers who may have been ineligible to claim some benefits due to their employment status at the time of taking out the policy. The withdrawal of existing financial products