Westpac said on Tuesday it will likely be fined 113 million Australian dollars ($80.8 million) for alleged compliance failures across its business over many years, including charging financial advice fees to thousands of dead customers.
Australia’s No. 3 lender admitted to six civil penalty proceedings filed by the country’s securities regulator, including allegations against its banking, superannuation, wealth management and now divested general insurance units.
The Australian Securities and Investments Commission had alleged Westpac charged over 10 million Australian dollars ($7.2 million) in advice fees to more than 11,000 deceased people and distributed duplicate insurance policies to over 7,000 clients.
These infractions took place over a 10-year period, ASIC claimed.
Australia’s financial sector has faced intense scrutiny since a Royal Commission inquiry in 2018 found widespread shortcomings across the industry, with charging the dead among the most common and damaging revelations.
“The issues raised in these matters should not have occurred, and our processes, systems and monitoring should have been better,” Westpac CEO Peter King said in a statement.
ASIC and Westpac will together propose the 113 million Australian dollar penalty to the federal court, and the lender will remediate about $80 million Australian dollars ($57 million) to customers, the ASIC said.
“The conduct and breaches alleged in these proceedings caused widespread consumer harm and ranged across Westpac’s everyday banking, financial advice, superannuation and insurance businesses,” ASIC Deputy Chair Sarah Court said.
“Westpac must urgently improve its systems and culture to ensure these systemic failures do not continue.”
She added that “it is unprecedented for ASIC to file multiple proceedings against the same respondent at the same time.”
Last week, the Reserve Bank of New Zealand said Westpac’s local unit needs to address risk governance and compliance concerns after an independent report highlighted “material shortcoming” in the board’s oversight.Internet Explorer Channel Network