The Australian Securities and Investments Commission (ASIC) has commenced legal proceedings against Westpac alleging widespread compliance letdowns across lender’s multiple businesses.
Westpac is facing six civil penalty proceedings in the Federal Court related to its banking, superannuation, and wealth management businesses as well as its former general insurance business.
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One of ASIC’s allegations is that Westpac charged A$10m in financial services advice fees to over 11,000 dead customers.
Notably, the lender has admitted the allegations in all of the proceedings and agreed to pay a penalty of A$113m ($80.6m).
ASIC Deputy Chair Sarah Court said: “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’s other allegations include that Westpac offered duplicate insurance policies to over 7,000 customers for the same property at the same time.
BT Funds Management, a subsidiary of Westpac, charged commission payments on insurance premiums, which were banned under the Future of Financial Advice reforms.
The regulator has alleged that the lender sold consumer credit cards and flexi-loan debt to debt purchasers with incorrect interest rates.
Westpac CEO Peter King said: “This outcome is an important step forward for us as we continue to fix issues and build stronger risk foundations. In each of these matters, Westpac has fallen short of our standards and the standards our customers expect of us.”
