Westpac to refund $7m

Westpac has formally agreed on the steps it will take to refund fees to 93,000 customers being overcharged $7 million.

It has reached a deal with regulators the Commerce Commission and Financial Markets Authority (FMA).

Westpac did not correctly discount fees on a number of different banking packages and self-reported the issue to the FMA and Commerce Commission in December 2017.

Initially, Westpac said 61,000 customers were affected by its incorrect application of discounts, to a value of approximately $1.28m.

Westpac said it planned to refund all fees incorrectly charged. The bank said it would also improve its systems and start a wider review to ensure customers were receiving appropriate discounts.

A year later, it confirmed it had identified similar issues with another 32,000 customers and about $5.7m had been inappropriately charged.

The affected banking packages included the Tertiary Pac, Career Starter Pac, Graduate Pac, International Student Pac, Relationship Rewards Scheme, Family Benefits and Westpac Staff Package, Bizpac, and Government Packages and Portfolio Package.

The bank has agreed to refund all fees and charges that have been incorrectly charged and will take all reasonable steps to reach impacted customers.

The FMA was notified of the issue because of potential breaches of the fair dealing provisions of the Financial Markets Conduct Act (FMCA). The Commerce Commission was also involved because of possible breaches relating to consumer credit contracts under the Fair Trading Act (FTA).

Westpac accepted that it may have contravened one or both of the acts.

Westpac NZ acting general manager of consumer banking and wealth, Gina Dellabarca, said the issue was identified as part of a proactive review of products and services initiated by Westpac NZ.