Westpac fined $113m over fee failures, charging dead customers

WESTPAC will pay $113m in fines after the corporate regulator’s last case with the bank over failures across its insurance, superannuation, wealth management and banking arms wrapped up.

The bank was fined $40m on Friday for its role in continuing to charge fees to dead customers’ accounts.

The bank was fined for charging fees to deceased estates from December 2008 until at least October 9, 2019.

The bank began a review into the fees in 2018.

Fees were charged on accounts. However, the bank’s wealth management business was found to have continued to deduct fees despite being notified that a customer had died.

ASIC had alleged Westpac had been alerted in April 2013 about the fees to deceased estates issue, but had failed to act.

This came as the latest in six cases settled against Westpac after being brought by the Australian Securities & Investments Commission in November last year.

ASIC deputy chair Sarah Court said she was pleased the penalties handed to Westpac were at the higher end of the range. However, those fines were awarded under the old regime.

“The bigger message is that all of the penalties in these six matters all fell under the old penalty regime and for similar conduct, should it occur now, the penalty regime has been very significantly increased,” Ms Court said.

“What we’ve seen across the Westpac businesses and much more broadly as the financial services royal commission demonstrated is widespread compliance and systems failures in our major financial institutions.”

Westpac did not contest the six cases, agreeing to the penalties with ASIC.

The bank provisioned the expected $113m in penalties at its 2021 full-year results.

At the time, Westpac chief executive Peter King welcomed the agreement on the six issues, as the bank moved to start work implementing and embedding its remediation program over the next two years.

The bank said it would remediate customers a total of $80m for its failures in the admitted proceedings.

On Thursday Westpac was handed a $12m fine after it and its subsidiary St George Bank overcharged customers in distress when it sent their debts to collectors.