The Australian Securities and Investments Commission (ASIC) announced it has commenced six civil penalty proceedings against Westpac, recommending that the bank and its businesses be penalised more than $100 million.
The six lawsuits – all of which will be considered separately – have been admitted to by Westpac and in each of the proceedings, a remediation program costing $80 million has already been finalised.
One of the more damning proceedings alleges that over a 10-year period, Westpac and its related entities charged over $10 million in advice fees to more than 11,000 deceased customers for financial advice services that were not provided due to their death.
Other proceedings involve charging customers for two insurance policies on the same property, over-charging insurance premiums on superannuation, failing to disclose fees on financial advice, on-selling credit card debt with incorrect interest rates and allowing the accounts of deregistered companies to remain open.
In a statement, Westpac’s CEO Peter King said the bank apologises “unreservedly” to customers.
“As flagged, we have been working to resolve a number of outstanding regulatory matters before the Bank,” Mr King said.
“We have cooperated with ASIC through the investigations and the process to get to this resolution today.
“In each of these matters, Westpac has fallen short of our standards and the standards our customers expect of us.
“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.”
ASIC Deputy chair Sarah Court said the allegations show multiple failures of how the bank processes information.
“ASIC is disappointed to have to yet again commence legal proceedings, on this occasion no fewer than six times, against a major bank,” Ms 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.
“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.”
Westpac and ASIC will jointly submit agreed proposed penalties for each of the proceedings, totalling $113 million.
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