Westpac set to pay $1.5m after mis-selling credit card insurance

Westpac looks set to pay a little over $1.5m in penalties after slugging customers for credit card insurance they didn’t want in a historical matter working its way through the courts.

A judge has questioned how sorry Westpac really is after it dudded credit card customers for insurance. Picture: NCA NewsWire / John Gass

Westpac looks set to pay a little over $1.5m in penalties after slugging customers for credit card insurance they didn’t want in a historical matter working its way through the courts.

This comes after the corporate regulator took aim at Westpac over the junk insurance sold to credit card customers.

The Australian Securities and Investments Commission alleges Westpac mis-sold the consumer credit insurance over several years, charging customers 52 cents for ever $100 of debt they had on the cards.

The case against Westpac comes after a string of similar cases against companies selling “junk insurance”.

Westpac has admitted to the conduct, which allegedly affected 141 customers.

ASIC noted in total the 141 customers had been dudded out of $10,999.49 in total for the fees for junk insurance.

However, Justice Anna Katzmann noted it was likely the true numbers of affected customers was “much more extensive”.

“Not everyone who is wrongly charged with these premiums would necessarily notice it, let alone complain about it,” she noted.

“It could be hundreds if not thousands of people out there who have suffered loss and are unaware of it.”

Westpac said it had remediated customers wrongly charged the fee.

In submissions for ASIC, Tim Faulkner SC, noted Justice Katzmann would be “spared” the calls of Westpac customers trying to cancel the insurance payments who were” quite exasperated” at the charges.

ASIC noted many of these customers may have been charged the insurance due to incentives to call centre staff, who received a commission for those who signed up.

Mr Faulkner noted this arose as a consequence of Westpac’s “general incentive to sell products”.

The regulator alleged some staff signed customers up to the insurance without their consent.

Justice Katzmann noted the Westpac case was “not the first time” the bank had been up in court.

“Westpac does not come to this court as a cleanskin,” she said.

But she questioned why Westpac, despite admitting to the offences, had not been more apologetic for the behaviour.

“I accept that Westpac is sorry but it would be more powerful if there was an affidavit from a senior officer of Westpac indicating that Westpac was remorseful,” she said.

Noting she had wished Westpac had explained “why the conduct occurred and can provide confidence to the court that the risk of it happening in the future is negligible”.

Justice Katzmann will now consider the penalty for Westpac.