November 30, 2021
The country’s third biggest bank will pay $81 million (AU$113 million) in penalties, and hand over $57 million in compensation to its customers in addition to the fine.
According to the Australian Securities and Investments Commission (ASIC), Westpac charged around $7.2 million in fees within a 10-year period to nearly 11,000 of its “deceased customers for financial advice services that were not provided due to their death,” and distributed duplicate insurance policies to more than 7,000 clients.
The banking giant was also 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 on-sale. The regulator estimated that at least 25,000 customers were charged more than $5 million in fees that had not been disclosed adequately.
The Australian regulator simultaneously launched six lawsuits against the bank over “systemic failures” across Westpac’s banking, super and wealth management division, as well as the insurance business, which was sold off in August.
“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,” ASIC Deputy Chair Sarah Court said.
According to ASIC, it is unprecedented for the regulator “to file multiple proceedings against the same respondent at the same time.”
Westpac CEO Peter King has vowed to tackle widespread compliance problems by pushing ahead with a cultural overhaul at the institution.
“In each of these matters, Westpac has fallen short of our standards and the standards our customers expect of us,” King said in a statement.
“The issues raised in these matters should not have occurred, and our processes, systems and monitoring should have been better. We are putting things right and unreservedly apologise to our customers.”