Westpac refunds $9.2m to affected clients
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.
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.
AUTHOR
Oksana Patron
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
