The Australian Securities and Investments Commission (ASIC) has launched six civil penalty proceedings against Westpac bank for multiple alleged compliance failures, including charging over 11,000 deceased customers for services.
The allegations came after several independent ASIC investigations during 2021 and were against Westpac’s banking, superannuation, and other businesses.
Westpac admitted to all allegations and agreed to pay $113 million (US$80.4 million) in penalties, including $80 million (US$57 million) in remediation to customers. These penalties were jointly agreed upon by Westpac and ASIC and are subject to court approval.
ASIC Deputy Chair Sarah Court said it was unprecedented for ASIC to file multiple court proceedings against the same respondent simultaneously, but these were “exceptional circumstances.”
“ASIC is disappointed to have to yet again commence legal proceedings, on this occasion no fewer than six times, against a major bank,” ASIC Deputy Chair Sarah 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.”
ASIC alleged that over a 10-year period, Westpac and its related entities charged over $10 million (US$7.1 million) in financial advice service fees to over 11,000 deceased customers.
Allegations against Westpac also include the issuing of duplicate insurance policies to over 7,000 customers, charging ongoing contribution fees for financial advice without proper disclosure, and selling consumer credit cards and flexi-loan debt with incorrect interest rates.
Court said a common aspect throughout the matters was poor systems, processes, and governance, which suggested an overall poor compliance culture within the bank.
“Westpac must urgently improve its systems and culture to ensure these systemic failures do not continue,” Court said.
Westpac said most affected customers had been compensated, and the remaining payments would be completed as quickly as possible.
“We have cooperated with ASIC through the investigations and the process to get to this resolution today,” 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.”
King acknowledged that Westpac had fallen short of its own standards and the standards that customers expected of them.
“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,” King said.