Westpac facing $113 million fine after charging 11,000 clients who had died
One of Australia’s largest banks has been caught charging 11,000 dead customers for financial advice.
Westpac has been slapped with six separate lawsuits after an extensive investigation revealed the bank charged dead customers millions of dollars.
Over a 10-year period, Westpac charged more than 11,000 deceased customers more than $10 million for financial advice services that were never provided due to their death, according to the Australian Securities and Investments Commission.
ASIC also revealed Westpac had duplicated insurance policies to over 7,000 customers, causing them to pay for two (or more) insurance policies where they had no need for additional policies.
The investigation also found the bank had been charging higher interest rates on customer debts than they were contractually allowed to, and were continuing to charge fees on deregistered company accounts.
The bank admitted to all of the allegations and will now be required to pay back $80 million to tens of thousands of affected customers.
Westpac has also agreed to pay fines of more than $100 million for their numerous compliance failures.
ASIC Deputy Chair Sarah Court said it was “unprecedented” for the Commission launch multiple proceedings against a single company, but the extent of Westpac's rule-breaking presented an “exceptional circumstance.”
“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,” Ms Court said.
“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.”
This is not the first time Westpac has found itself caught in a scandal for breaking the law.
In 2019, Australia’s largest financial regulator found the banking giant had breached Australia’s anti-money laundering and counter-terrorism finance laws more than 23 million times.
The breaches included failing to properly vet thousands of transactions that could be linked to child exploitation in the Philippines and other parts of South-East Asia.
Following legal proceedings launched by AUSTRAC, Westpac agreed to pay a 1.3 billion dollar penalty for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
The six new lawsuits launched by ASIC against the bank will now be separately considered and determined by the Federal Court.
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