Australian banking major Westpac has agreed to step up its processes for boosting credit card limits after the Australian Securities and Investments Commission (ASIC) flagged concerns over the practices.
The corporate watchdog revealed concerns that the bank failed to inquire about credit cardholders’ income and job status when they applied for an increase in credit limit.
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The regulator further said that Westpac may have flouted responsible lending norms by relying on automated processes to evaluate applications of cardholders.
In order to address these concerns, Westpac has vowed to ensure that the financial status of cardholders is ascertained before increasing their credit card limits.
Westpac has also launched a review program that may refund customers who are facing financial difficulty after increasing their credit limits.
Moreover, the bank has also agreed to contribute $1m over four years to support financial literacy and financial counselling.
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By GlobalDataASIC senior executive leader of deposit takers, credit and insurers, Michael Saadat said: "Credit card issuers, like all consumer credit providers, have to meet obligations under responsible lending laws.
"ASIC maintains an ongoing focus on compliance with these laws. Where we see non-compliance, we will take action, including taking steps to ensure affected consumers are appropriately remediated."
