Federal regulator ASIC has launched a major series of legal actions against Westpac, alleging that the Big Four bank made a range of compliance failures.
The charges are across Westpac’s banking, super and wealth management division, as well as the insurance business that was sold off in August. The home loan department specifically has not been targeted.
The accusations relate to the bank charging customers who had died for financial advice services, duplicating insurance policies, charging commissions on super insurance after regulations had changed to outlaw that practice, inadequately disclosing fees, charging fees for companies that it had failed to properly deregister and overcharging interest on onsold credit card debt.
Furthermore, Westpac has also been charged for failing to ensure that financial services were provided efficiently, honestly and fairly in all of the cases except for that of super insurance and debt onsale.
Westpac has already admitted to the allegations and will pay $80m in reimbursements to customers. They may still be liable for $100m in penalties as a result of the legal case brought by ASIC.
APRA are also considering the charges, and are working in a coordinated manner with ASIC.
“ASIC is disappointed to have to yet again commence legal proceedings, on this occasion no fewer than six times, against a major bank,” said ASIC Deputy Chair Sarag Court.
“The conduct and breaches alleged in these proceedings caused widespread consumer harm and ranged across Westpac’s everyday banking, financial advice, superannuation and insurance businesses.”
“A common aspect across these matters has been poor systems, poor processes and poor governance, which is suggestive of an overall poor compliance culture within Westpac at the relevant time.”
“Customers are entitled to have trust and confidence in Westpac being able to deliver what it promises, without suffering financial harm. Westpac must urgently improve its systems and culture to ensure these systemic failures do not continue.”
“It is unprecedented for ASIC to file multiple proceedings against the same respondent at the same time. However, these were exceptional circumstances.”
“ASIC had numerous Westpac-related matters under investigation through the course of 2021, and we decided to expedite those matters for consideration by the Court at the earliest opportunity.”
