The Australian Securities and Investments Commission (ASIC) has launched legal action against Westpac regarding allegations of “poor systems, poor processes and poor governance”. The filings also address claims that Westpac charged over 11,000 deceased customers for advice fees.
ASIC has filed six court cases against Westpac for alleged maladministration impacting customers. Westpac has since admitted that, over a 10-year period, the bank charged more than $10 million in advice fees to deceased customers.
Another concern levied at Westpac was allegations of double charging, with over 7,000 customers being made to pay duplicate insurance policies at the same time.
“ASIC is disappointed to have to yet again commence legal proceedings, on this occasion no fewer than six times, against a major bank,” said 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 says their investigations into Westpac’s systems and processes unmasked widespread compliance issues, much of which directly affected customers.
“Customers are entitled to have trust and confidence in Westpac being able to deliver what it promises, without suffering financial harm. Westpac must urgently improve its systems and culture to ensure these systemic failures do not continue,” Ms Court said.
ASIC is also pursuing legal proceedings against Westpac subsidiaries, including BT Funds Management Limited and BT Portfolio Services Limited. The regulator alleges BT Funds Management overcharged members for insurance premiums to include commission payments, which had already been prohibited under the Future of Financial Advice legislation.
Westpac has admitted to all of ASIC’s allegations, agreeing to pay approximately $80 million in compensation to the estates of impacted customers. However, the cases are still yet to be settled in court.