Westpac fined $113m for compliance failures
Westpac has been ordered to pay penalties of $113 million for compliance failures in banking, superannuation, wealth management and insurance.
The Federal Court's decision followed six matters raised by the Australian Securities and Investments Commission (ASIC).
The six matters were fee for no service-deceased customers, general insurance, inadequate fee disclosure, deregistered company accounts, debt onsale and insurance in super.
These were fined $40 million, $15 million, $6 million, $20 million, $12 million and $20 million respectively.
More than 70,000 customers were affected by the breaches, ASIC said.
The Westpac businesses affected by the matters were Westpac Banking Corporation, Advance Asset Management, Asgard Capital Management, BT Funds Management, BT Funds Management No.2, BT Portfolio Services, Securitor Financial Group and Magnitude Group.
Across all six matters, Justice Beach noted that systems and compliance failures were a common feature and the misconduct by Westpac was considered serious.
ASIC deputy chair, Sarah Court, said: “The breaches found by the Court in these six cases demonstrate a profound failure by Westpac over many years and across many areas of its business to implement appropriate systems and processes to ensure its customers were treated fairly.
“Westpac, like all licensees, has an obligation to be honest and fair in its provision of financial services. Despite this, Westpac failed to prioritise and fund the systems upgrades necessary to help fulfil this obligation.
“Over the course of 13 years, more than 70,000 customers have been affected by these failures, either by being incorrectly charged or given the wrong information. The sheer scale of this impact suggests that, at the time, Westpac had a culture that did not prioritise compliance.”
In all matters other than debt onsale and insurance in super, ASIC alleged and the Court found that Westpac failed to ensure that its financial services were provided efficiently, honestly and fairly.
Westpac admitted to the allegations in each of the proceedings and would remediate more than $80 million to customers. Westpac consented in each of the matters to the orders made and to the penalties and cooperated with ASIC in resolving the matters.
AUTHOR
Laura Dew
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