Westpac hit with life insurance class action
WESTPAC is being sued for allegedly overcharging life insurance policyholders, in a claim that could hit
$100 million.
The case has been filed by Shine Lawyers in the Federal Court and alleges the bank took advantage of customers through referrals to Westpac financial planners who routinely signed customers up for more expensive Westpac life insurance products.
Jan Saddler from Shine says customers were charged 4.5% more for the Westpac packages than if they obtained the same insurance elsewhere.
“We believe Westpac took advantage of its relationships with customers to boost its bottom line by signing clients up to their own in-house insurance, which they knew was more expensive,” Ms Saddler said.
The charges, paid since 2010, could involve tens of thousands of customers.
“The bank and financial planners have an obligation to act in the best interests of their clients. In this case Westpac has abused its powers and the trust of customers,” she said.
Customers who received financial advice and life insurance since 2010 might be entitled to join the action and recover compensation if they received financial advice from a financial advisor of Westpac, BT, St George Bank, Bank of Melbourne or BankSA, and obtained a life insurance policy from one of those outlets as a result of that advice.
Ms Saddler said the action would seek to return millions of dollars to customers of “an institution they entrusted to act in their interests”.