Westpac refunds $9.2m to affected clients

14 September 2016

Westpac has refunded around $9.2 million to 161,414 eligible customers after it failed to waive fees on Westpac and St. George branded savings and transaction accounts.

Following the Corporations Act, Westpac reported it to the Australian Securities and Investments Commission (ASIC) which said it had acknowledged the "cooperative approach taken by Westpac in resolving this matter".

Between 2007 and 2013, Westpac Choice and Westpac Reward Saver accounts were opened for some eligible clients, aged under 21 years, without the relevant fee waivers being applied. At that time, Westpac relied on its staff to manually apply the following fee waiver benefits.

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Westpac also reported that there were over 28,000 customers, who were under the age of 18, and who were eligible for a freedom student transaction account, operated by St. George with no monthly service fee, but instead held a standard St. George transaction account which charged a monthly fee.

ASIC deputy chairman, Peter Kell, said: "Financial institutions that offer products with benefits such as fee waivers must have effective and robust systems in place to deliver the promised benefits to consumers.

"Businesses that rely on manual processes to apply waivers, discounts and other benefits should carefully consider how they manage the risks of processes not being followed, including having appropriate controls and procedures in place."

Westpac said it had now provided refunds to the affected customers with payments including an additional amount reflecting interest.

Additionally, the bank assured it would monitor the activity to ensure the correct treatment of eligible accounts and introduced an automated application of the relevant fee waivers based on the customer's date of birth submitted during the application process.

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Another bank fiasco - another reason for a Royal Commission into the banks and their hidden and gouging practices. With these sort of disclosures on an almost daily basis, obviously there is much more to discover.

You are right Hedware. Westpac would never have done anything about this if we didn't already have a royal commission. thank goodness we have a royal commission finding all this stuff out...wait, what?

Don't be naive and think all stuff has been found out. They are being forced into these admissions to avoid the spotlight of a Royal Commission. They are lobbying intensely to stop Australians finding out about their shady practices and to stop having to pay compensation for their malpractices.

Anyone working in the financial advice industry should be clamouring for transparency and integrity in our banking sector. How can good advice be provided if financial advisors are ignorant of what is going on? How can financial advisors maintain a good reputation if they and their clients are being shafted by deceitful practices by the banks?

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