5.9k Share this
Big four bank Westpac has been ordered to pay a $1.5 million penalty by the Federal Court for selling credit insurance to almost 150 customers who had not requested it.

The court found from April to July 2015, Westpac issued consumer credit insurance policies to 141 customers who did not request the product.

Each of these customers were sent a letter that asserted the insurance premiums needed to be paid and debited payment of these amounts from the customer’s credit card.

The Federal Court found Westpac had issued consumer credit insurance policies to 141 customers who did not request the product. (AAP )

The court found Westpac did not have the right to these payments and customers were not liable to pay them.

Sarah Court, Deputy Chair of the Australian Securities and Investments Commission (ASIC), said the sale of the insurance only benefited Westpac.

“ASIC has identified consumer credit insurance to be a poor value product that leads to poor outcomes for consumers,” Ms Court said.

“In this case, customers were charged for insurance policies they had not agreed to buy and therefore were unlikely to use.

“The sale of these products benefitted the bank and not the consumer.”

ASIC Deputy Chair Sarah Court said today’s action was just one part of an industry-wide crackdown on consumer harms in insurance. (Ben Searcy)

Ms Court said today’s action was just one part of an industry-wide crackdown on consumer harms in insurance.

“ASIC has secured $270 million in remediation across the sector for consumers harmed by the sale of consumer credit insurance,” she said.

“The industry is now clearly on notice as to the consumer harm associated with the mis-selling of these products, and under the new penalty regime ASIC will be seeking significantly increased penalties for misconduct of this kind.”

Adelaide home smashes expectations with $2.52 million sale

In her judgement, Justice Anna Katzmann said Westpac’s contraventions were not “deliberate, reckless or systemic” but rather showed a “lack of care”.

In a statement to 9News.com.au, Westpac apologised and said all affected customers have already been remediated.

“In December 2021, Westpac agreed with ASIC to resolve legal proceedings, filed by ASIC in April 2021 in the Federal Court, which relate to the sale of consumer credit insurance (CCI) products. This settlement was one of a number of longstanding regulatory issues previously disclosed,” the bank said.

“Westpac has not sold CCI products since 2019 and we have remediated the affected customers.

“We apologise to the affected customers and remain focused on putting things right and simplifying our business.

“Westpac and ASIC agreed a Statement of Agreed Facts and penalty amount of $1.5 million which the court has today approved.”

Source: 9News

5.9k Share this
You May Also Like

Dow Jones Industrial Average On Longest Losing Streak Since 1932

After a promising start to morning trading, the major stock indexes turned…

Three high school graduation shootings erupt in 24 HOURS

Hundreds of graduates are traumatized after shootings erupted at high school commencement…

Legalise Shoplifting? Officers Should Use ‘Discretion’, Argues Watchdog

Police officers should use “discretion” when deciding to prosecute people for shoplifting…

South Australian teen charged with supplying ‘fake’ Xanax

Police searched the Elizabeth Vale mans home today and found more than…

Russian soldier on trial asks victim’s widow to forgive him

A Russian soldier facing the first war crimes trial since the start…

Where do I vote, and every other question you have about the election

By 6pm Saturday, Australians need to have voted in the federal election,…

Disney Launches LGBTQ Clothing Line for Children and Older, Donating Profits to LGBTQ Groups

As it continues to wage war against Florida’s Parental Rights in Education…

Prince of Wales and the Duchess of Cornwall lay wreath at the National War Memorial

Prince Charles and the Duchess of Cornwall were met by a small group…