Westpac pays price for boosting credit card limits

Westpac credit card clients whose credit limits were adjusted without adequate consultation, may receive refunds as part of a remediation process the bank has committed to.

The bank agreed to enter into a remediation programme that includes "proactive customer refunds, and a contribution of $1 million over four years to support financial counselling and literacy", after the Australian Securities and Investments Commission (ASIC) flagged concerns over its processes for boosting credit card limits.

ASIC reported that "Westpac, in relying largely on its automated processes, was not making reasonable inquiries of individual cardholders," which was not consistent with the responsible lending obligations under the National Consumer Credit Protection Act 2009.

In response to ASIC's concerns, Westpac has committed to:

  • Changing its credit limit increase processes to ensure that, at a minimum, reasonable inquiries are made about a customer's income and employment status to ascertain their financial situation before the limit is increased;
  • A remediation program involving a review of credit limit increases previously provided where a cardholder experiences financial difficulty, with consumer refunds paid where appropriate; and
  • Engaging an independent external expert to provide assurance of the effectiveness of the remediation program.



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Comments

Wrstpac are lying. I contacted them on six occasions before i could get anyone who knew anything about this and then was told i was not on their list of parameters from the Asic statement.....i asked for a review and printed documentation showing they had researched my app for increase of limit. They were stone wailing and i had to be very forcefully to get any action. I suggest all westpac clients call and ask for the documentation as they clearly have not being keeping it or even conducting their requirements under the relevant act of 2009 which opiates them not to increase card limits id financial hardship may result.

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