Westpac cracks down on financial abuse with alert system for vulnerable accounts

Suspicious payments will be flagged across 150,000 Westpac accounts with power of attorney arrangements as part of a new alert system to tackle financial abuse.

Westpac’s new transaction monitoring adds to work it has undertaken in recent years to combat financial abuse. Picture: ChrisPavlich/The Australian

Westpac is bolstering its “zero-tolerance” approach to financial abuse, introducing a new monitoring and alerting system for 150,000 customer accounts with a power of attorney arrangement, to help to identify their potential misuse.

The new alerting system will be based on “certain” account activity and suspicious payments will be flagged to an internal specialist team for further investigation, the bank said.

“We’ve brought together three specialist teams to administer the alerts and undertake further investigation on each,” Westpac customer executive Tiffiny Lewin said.

“Our dedicated customer care team, who have expertise in supporting people in vulnerable situations, will step in to assist where the investigation indicates misuse is likely.”

A power of attorney is a legal document that gives a person – called the attorney – the authority to act on behalf of, and in the interests of, another person who grants that power. Rules vary state to state but it can include authorisation to make legal and financial decisions such as managing assets, paying taxes, making investments, or paying for everyday expenses.

Despite often being granted to support senior Australians, many become victims of financial abuse at the hands of people who have a power of attorney to manage their affairs.

“As many as 15,000 customers have a power of attorney arrangement in place at any one time and while the vast majority of these act legitimately in the best interests of the individual, sadly that’s not always the case,” Ms Lewin said.

“It’s unacceptable someone would use their position as a power of attorney for personal gain and Westpac is committed to doing what we can to stamp this out. We’ve invested in this monitoring and we’re optimistic that over time this will make a difference,” Ms Lewin said.

The Council on the Ageing (COTA), an organisation representing about 9 million Australians over 50, welcomed Westpac’s move to add the extra layer of transaction monitoring and controls.

Westpac is introducing a new monitoring and alerting system for 150,000 customer accounts with a power of attorney arrangement.

“This initiative by Westpac to actively monitor alerts and investigate further where data raises a question is a great step forward that will hopefully result in far fewer older people being taken advantage of,” said COTA chief executive Patricia Sparrow.

“We hope it will provide Westpac customers with another layer of peace of mind that their Attorney continues to do things in line with their wishes and preferences.”

The bank said it had updated its terms and conditions for transaction and savings products to reflect its “zero-tolerance” attitude to customers potentially using its products to engage in financial abuse or unacceptable conduct.

“This change puts would-be abusers on notice there are serious personal consequences for misusing the bank’s products and services, including warnings or in extreme cases, being exited from the bank,” said Ms Lewin.

“Those consequences can also apply where a power of attorney is found to be abusing their position,” she added.

Westpac’s new transaction monitoring adds to work the bank has undertaken in recent years to combat financial abuse. That includes blocking inappropriate language in payment descriptions and introducing mandatory customer safety training for employees involved in product design. To date, over 1,000 employees had completed the training, Ms Lewin said.