Westpac Banking Group fined $40m for charging fees to dead customers

The bank had charged 11,000 dead customers over $10m worth of advice fees over a decade.

SYDNEY, AUSTRALIA – NewsWire Photos MARCH 26, 2021 – A generic photograph of the Westpac branch located on Hunter Street in Sydney. Picture: NCA NewsWire / Christian Gilles

Westpac has been handed a $40m fine after the corporate regulator found the bank had charged 11,000 dead customers over $10m worth of advice fees over a decade.
The bank was fined for charging fees to deceased estates from December 2008 until at least 9 October 2019.

The bank commenced a review into the fees in 2018.

Fees were charged on accounts, however the bank’s wealth management business was found to have continued to deduct fees despite being notified that a customer had died.

ASIC had alleged Westpac had been alerted in April 2013 about the fees to deceased estates issue, but had failed to act.

The latest judgment against the bank comes as the corporate regulator seeks to close off six cases against the bank expected to total more than $113m in fines.

Westpac did not contest the six cases the Australian Securities and Investments Commission lobbed at the bank in November last year.

The bank provisioned the expected $113m in penalties at its 2021 full-year results.
At the time Westpac chief executive Peter King welcomed the agreement on the six issues, as the bank looks to start work implementing and embedding its remediation program over the next two years.
ASIC deputy chairman Sarah Court acknowledged a change of approach from Westpac, which did not fight the claims and worked with the regulator to agree the combined $113m in fines.
The bank said it would remediate customers $80m for its failures in the admitted proceedings.

On Thursday Westpac was handed a $12m fine after it and its subsidiary St George Bank overcharged customers in distress when it sent their debts to collections.
Westpac submitted the issues around incorrectly charging customers were due to systems failures at the bank and not deliberate attempts to profit from the misconduct.

Westpac is also before the courts after it failed to cease charging fees to bank accounts of deregistered companies.
ASIC has also taken aim at Westpac’s mis-selling of duplicate general insurance policies to customers without their content as well as insurance products sold to customers by BT where customers were wrongly charged advisor commissions.
The bank’s inadequate disclosure of adviser fees received on superannuation and investment products has also landed the bank in hot water.