The Aussie regulator has announced six civil penalty proceedings against Sydney-headquartered Westpac. ASIC noted that each of the proceedings results from an individual investigation and all uncovered widespread compliance failures across multiple Westpac businesses.
The company’s business units facing the allegations include its banking, superannuation and wealth management brands as well as Westpac’s former general insurance business.
The orporate watchdog, said one of the investigations uncovered that the bank had charged more than $7 million in fees over 10 years to more than 11,000 “deceased customers for financial advice services that were not provided due to their death.”
ASIC also uncovered that Westpac distributed duplicate insurance policies to more than 7,000 customers, causing customers to pay for two, or more, policies.
The regulator also estimates that 25,000 customers were charged more than $5 million in fees that had not been disclosed adequately.
ASIC is disappointed to have to yet again commence legal proceedings, on this occasion no fewer than six times, against a major bank. 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.
ASIC noted that Westpac has admitted the allegation and will remediate $80 million to customers. The combined penalties will amount to over $100 million, the announcement said.
Westpac CEO, Peter King, said:
As flagged, we have been working to resolve a number of outstanding regulatory matters before the Bank. We have cooperated with ASIC through the investigations and the process to get to this resolution today.
Westpac saw proceedings from ASIC earlier in May, as well. The allegations included unconscionable conduct, breaches of licensee obligations for financial services in Australia, and insider trading, feeding into a controversial transaction made back in October 2016, when Westpac played a role in processing an interest rate swap of around $12 billion.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.