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Westpac Bank penalised $113 million for multiple compliance breaches.

The Federal Court has ordered Westpac to pay penalties in the amount of $113 million for widespread compliance failures across multiple businesses, including Westpac’s banking, superannuation, wealth management and insurance brands.

The six matters against Westpac relate to:

  1. Fee for no service – Deceased customers (Penalty $40M)
  2. General Insurance - Westpac distributed duplicate insurance policies to over 7,000 customers causing customers to pay for two insurance premiums when they ddi not need the additional policies (Penalty $15M)
  3. Inadequate fee disclosure (Penalty $6M)
  4. Deregistered company accounts that remained open and continued to be charged fees (Penalty $20M)
  5. Debt on sale - Westpac sold consumer credit card and flexi-loan debt to debt purchasers with incorrect interest rates. (Penalty $12 M)
  6. Insurance in Super - Westpac subsidiary, BT Funds Management charged members insurance premiums that included commission payments, despite commissions having been banned under the Future of Financial Advice reforms (Penalty $20M)

Across all six cases the Federal Court highlighted that the systems and compliance failures were a common feature and the misconduct by Westpac was considered serious

ASIC Deputy Chair Sarah Court said, ‘the breaches found by the Court in these six cases demonstrate a profound failure by Westpac over many years and across many areas of its business to implement appropriate systems and processes to ensure its customers were treated fairly. Westpac, like all licensees, has an obligation to be honest and fair in its provision of financial services. Despite this, Westpac failed to prioritise and fund the systems upgrades necessary to help fulfil this obligation.

Westpac admitted to the allegations in each of the proceedings and will remediate more than $80 million to customers. 

Westpac consented in each of the matters to the orders made and to the penalties and cooperated with ASIC in resolving the matters.