Insights

Westpac (ASX:WBC) whacked with $10.5 million penalty

Subsidiaries cop $750,000 fine for each wronged customer after illegally raking in $650 million funds under management.
The post Westpac (ASX:WBC) whacked with $10.5 million penalty appeared first on The Motley Fool Australia. –

The Federal Court has ordered subsidiaries of Westpac Banking Corp (ASX: WBC) to pay a total of $10.5 million in fines.

The penalty was determined after the High Court decided in February that Westpac Securities and BT Funds had failed to act in the best interests of their customers.

The judgment found that the businesses provided personal financial product advice to 14 clients, even though neither brand was licensed to do so.

According to Australian Securities and Investments Commission commissioner Danielle Press, Westpac was caught “actively conducting” a campaign to bring over clients into the bank’s superannuation products.

“In doing this, Westpac failed to act in the best interests of their customers,” she said.

“Consumers’ decisions about their superannuation are significant long-term financial decisions affecting their retirement income. Financial institutions seeking to influence those decisions by providing financial product advice must comply with the law designed to protect consumers.”

Westpac cops $750,000 penalty per customer

The massive total fine amounts to $750,000 for each wronged customer.

“The penalty of $10.5 million handed down related to calls made to just 14 consumers and should act as a strong deterrent to any entity breaching these provisions of the law,” said Press.

Both Westpac Securities and BT Funds attempted to convert clients via telephone sales campaigns.

ASIC found that the drive resulted in Westpac businesses increasing their funds under management by almost $650 million between 1 January 2013 and 16 September 2016. More than 30,000 customers deposited funds into Westpac super products over that time.

Federal Court justice Michael O’Bryan has not yet published the full reasoning for the penalties handed down to Westpac.

Westpac shares were up 0.43% on Tuesday morning, trading at $25.89. They’ve gained more than 31% this year.

In December 2018, the Federal Court found the Westpac subsidiaries breached their obligations to act honestly and fairly but disagreed that the provided advice was personal.

But, in October 2019, the full court of the Federal Court reversed that ruling, unanimously finding the bank dished out personal advice to the 14 customers.

The post Westpac (ASX:WBC) whacked with $10.5 million penalty appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Westpac (ASX:WBC) share price rises amid mortgage rate shake-up
Westpac (ASX:WBC) share price is now trading on a forecast 3.5% fully franked dividend yield
What’s moving the ASX 200 Index (ASX:XJO) on Monday?

ASX 200 Weekly Wrap: Miners drag ASX back to earth

Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!