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Westpac pays hefty fines settling 6 ASIC investigations
A law firm has called on Westpac to “walk the talk” after the big four bank paid over $110 million in fines to settle six of seven ASIC investigations this week.
Lauren Croft
Following an agreement to pay fines totalling $113 million in the Federal Court on Tuesday (30 November), Westpac CEO Peter King issued a statement apologising to customers.
“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.”
In April this year, ASIC launched civil penalty proceedings against the bank, alleging that Westpac mis-sold consumer credit insurance with credit cards, and other credit facilities, to customers who had not agreed to buy the policies.
This investigation was in addition to a number of previous problems for Westpac, including allegations of insider trading in May and a $30 million class action settlement.
Having settled six of the seven ongoing cases against them, Westpac will now begin to focus on remediation plans – but Slater and Gordon Lawyers has said it isn’t enough.
Slater and Gordon practice group leader Andrew Paull said if the bank was serious about “righting the wrongs of the past”, they would immediately take steps to remediate the thousands of vulnerable Australians they ripped off through their junk insurance.
“Customers who trusted the big banks were ripped off and continue to be out of pocket despite a royal commission and numerous ASIC investigations which found Westpac’s behaviour was reprehensible,” he said.
“In terms of junk insurance many people who purchased these insurance products had disabilities, were unemployed, or were critically ill, and therefore not eligible to claim against the insurance products.
“Others were simply led to believe the insurance they bought was free, or mandatory. Neither was the case. Despite this appalling behaviour, legal action continues to be most customers’ only recourse for recovering the millions they lost.”
ASIC deputy chair Sarah Court said that the regulator was “disappointed to have to yet again commence legal proceedings” against a major Australian bank.
“It is unprecedented for ASIC to file multiple proceedings against the same respondent at the same time,” she said.
“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.”
After hundreds of thousands of Westpac customers were affected, the big four bank has admitted the allegations in each of the proceedings and will pay approximately $80 million in compensation to consumers.
“In our experience Westpac would rather litigate and do everything they can to avoid remediating customers,” Mr Paull added.
“If Westpac were truly committed to righting the wrongs of the past, it’s time for the bank to come to the table and compensate the thousands of customers who were ripped off with these junk insurance products.”
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
