ASIC launches six legal actions against Westpac

In an unprecedented move, the corporate regulator has launched six civil penalty proceedings against Westpac in the Federal Court that all allege widespread compliance failures across its banking, superannuation, wealth management, and its former general insurance business.

The Australian Securities and Investments Commission (ASIC) said in an announcement the alleged conduct occurred over many years and affected thousands of consumers.

ASIC deputy chair, Sarah Court, said: “It is unprecedented for ASIC to file multiple proceedings against the same respondent at the same time.

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“However, these were exceptional circumstances. ASIC had numerous Westpac-related matters under investigation through the course of 2021, and we decided to expedite those matters for consideration by the court at the earliest opportunity.”

Court said a common aspect across the matters had been poor systems, processes, and governance which was suggestive of an overall poor compliance culture with Westpac.

Westpac admitted the allegations in each of the proceedings and would remediate approximately $80 million to customers.

ASIC and Westpac would submit to the court that combined penalties of more than $100 million was appropriate.

Each matter would now be separately considered and determined by the court.

In response to the matters filed, Westpac said the majority of affected customers had been compensated and any remaining payments would be completed as quickly as possible.

Westpac chief executive, Peter King, said: “This outcome is an important step forward for us as we continue to fix issues and build stronger risk foundations.

“In each of these matters Westpac has fallen short of our standards and the standards our customers expect of us. The issues raised in these matters should not have occurred, and our processes, systems, and monitoring should have been better. We are putting things right and unreservedly apologise to our customers.”

The six matters were:

  • Fee-for-no-service for deceased customers – Over a 10-year period, ASIC alleged Westpac and related entities charged over $10 million in advice fees to over 11,000 deceased customers;
  • Insurance in super – ASIC alleged subsidiary BT Funds Management charged members insurance premiums that included commission payments, despite commissions having been banned under the Future of Financial Advice (FOFA) reforms;
  • Inadequate fee disclosure – ASIC alleged that Westpac licensees BT Financial Advice, Securitor and Magnitude (all no longer operating) charged ongoing contribution fees for financial advice to customers without proper disclosure. It is estimated that at least 25,000 customers were charged over $7 million in fees that had not been disclosed, or adequately disclosed;
  • General insurance – ASIC alleged that Westpac distributed duplicate insurance policies to over 7,000 customers for the same property at the same time, causing customers to pay for two (or more) insurance policies where they had no need for the additional policies;
  • Deregistered company accounts – ASIC alleged that Westpac did not have appropriate processes to manage accounts held in the names of deregistered companies. As a result, Westpac allowed approximately 21,000 deregistered company accounts to remain open and continued to charge fees on those accounts; and
  • Debt onsale – ASIC alleges that Westpac sold consumer credit card and flexi-loan debt to debt purchasers with incorrect interest rates. These interest rates were higher than Westpac was contractually allowed to charge on at least part of the debts, resulting in more than 16,000 customers, who were likely to be in financial distress, being overcharged interest.

The full list of Westpac businesses against which the allegations are made were:

  • Westpac Banking Corporation;
  • Advance Asset Management Limited;
  • Asgard Capital Management Limited;
  • BT Funds Management Limited;
  • BT Funds Management No. 2 Limited;
  • BT Portfolio Services Limited;
  • Securitor Financial Group Pty Limited; and
  • Magnitude Group Pty Ltd



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The ASIC tax at work but who pays? The consumer of course as the "civil penalties" will need to be recovered from the clients of Westpac (and AMP, MLC, IOOF, CBA et al). ASIC are never around to fight the battles fror the industry or consumers but after the battle has been won (or lost) you can rely upon ASIC to come through and bayonet the wounded, and then write the press release.

At what point will those responsible finally admit that letting the banks into advice was a mistake?

Great work ASIC, no doubt Real Adviser will be paying for another Big Bank court case as Advisers are your litigation funders but Advisers don’t get the 50% split of funds received like other litigation funders.
ASIC I bet not 1 single Westpac executive, manager, AFSL RM, CEO or Board member are personally charged, persecuted, named & shamed, fined, banned or jailed.
Of course not ASIC you only reserve those charges for Advisers.
Instead Westpac share holders will pay the fines and the executives walk away unscathed into the next Big Bank fiasco.
ASIC you are a disgracefully misguided mess.

ASIC is corrupt.

Union industry funds had/still have exactly these issues & worse (I worked inside ISA at the time and know first hand) with 'extra commissions' negotiated not for the fund but for the trustees/ISA to receive from members' massive insurance premium hike 6 years ago and yet no action nor investigation from ASIC.

If this is true, get a whistle, take a deep breath and....you know what to do. Maybe reach out to Jeff Morris for some advice if you are scared. I'm sure he could help you. That information, if true, needs to be aired publicly for the good of the Australian public. Best wishes to you.

Yes, typical, ASIC goes after the big banks, and they "come to an understanding", "admit the allegations" and the CEO comes out and says "this is an important step forward for us".....seriously? There is not one employee, Manager, RM, Director of Westpac before the Courts, and the Shareholders just have to accept that nearly $200 Million walks out the door, just like that, because "its an important step forward for us".....
Advisers today are being hunted down, put before ASIC and having their Licensees, AR's and livelihood taken away if we get the date wrong on an EFDS, or our OASA is $1 out.......this is a disgrace and an embarrassment to what was a good industry, now it is just a boxing ring for Industry Super funds, hopeless Associations and Bureaucracy that goes after the easy targets - Advisers who don't have Lawyers and Billions of dollars behind......

...and Dover gets it's AFSL cancelled for a bad FSG that ASIC knew about for 2 years whilst no customers lost any money and 400 advisers were thrown in the drink with no life raft....what will happen to Westpac...SweetFA...a big fine that means nothing to them.

Front line staff: Hello CEO, when you joined you said , culture issues shouldn’t be ignored, swept under the carpet or downplayed

CEO: Did I say that? Oh yes, I truly believe culture is critical but that is not my Job and so will spend the least amount of time.

Front line staff: You said we can approach you directly and speak up; we have a major problem in the operations; actually outdated systems, processes and dysfunctional governance

CEO: would you please go to head of P&C

1. Financial Advisers are banned and driven suicidal ...
2. ASIC never holds any employees in big banks to account for decisions implemented that caused harm
3. ASIC does not engage in restorative justice, wherein wrong doers (including bank managers and executives up the chain in its hierarchy, who were paid harm bonus incentives) are not required to attend rehabilitation courses in ASIC's offices and have to pass ASIC exams before their suspension to engage in financial services is lifted and allowed to engage in regulated activities again - ASIC IS NEVER PART OF THE SOLUTION TO REEDUCATE AND RETRAIN SO PAST WRONG DOERS BECOME ADVOCATES OF BETTER COMPLIANCE STANDARDS IN THE FUTURE, which ASIC fails in FASEA Standard No 12 " ... in the public interest".

If ASIC had a social conscience, it should strip bank employees from their 'paid harm bonus incentives' under procedural justice and distributive fairness ?!?

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