It wasn't a great day for the S&P/ASX 200 Index (ASX: XJO) this Friday, to say the least. The ASX 200 ended up closing the day down a nasty 1.57% at 7,473.3 points. That was its largest one-day fall in months. As you might expect, the Westpac Banking Corp (ASX: WBC) share price didn't do too much better. Westpac shares ended up finishing down by 1.22% at $24.21.
This comes amid news that the ASX 200 big four banking giant is in line to pay another corporate fine. Westpac already holds the dubious distinction of being on the hook for Australia's largest-ever corporate fine. That was a whopping $1.3 billion penalty that the bank had to pay back in 2020. This was in response to contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act.
Well, today, Westpac has been issued with another fine. Albeit one not quite as large. According to the Australian Securities and Investments Commission (ASIC), Westpac has been ordered by the Federal Court to pay a $113 million penalty. According to the watchdog, this was for "widespread compliance failures across multiple businesses, including Westpac's banking, superannuation, wealth management and insurance brands".
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Westpac fined for multiple offences
Here's some of what ASIC deputy chair Sarah Court had to say on this announcement:
The breaches found by the Court in these six cases demonstrate a profound failure by Westpac over many years and across many areas of its business to implement appropriate systems and processes to ensure its customers were treated fairly. Westpac, like all licensees, has an obligation to be honest and fair in its provision of financial services. Despite this, Westpac failed to prioritise and fund the systems upgrades necessary to help fulfil this obligation…
Over the course of 13 years, more than 70,000 customers have been affected by these failures, either by being incorrectly charged or given the wrong information. The sheer scale of this impact suggests that, at the time, Westpac had a culture that did not prioritise compliance.
What did the bank do?
The alleged offences that Westpac has been fined for include:
- 'Fees for no service' charged to deceased customers
- Issuing duplicate insurance policies
- Inadequate fee disclosures for financial advice
- Allowing accounts of deregistered companies to remain open and active
- Onselling consumer credit card and flexi-loan debt with incorrect interest rates
- Including banned commission payments in superannuation insurance premium charges.
According to the release, Westpac has "admitted to the allegations in each of the proceedings and will remediate more than $80 million to customers".
