- Australia’s financial watchdog has launched civil penalty proceedings in the Federal Court against Westpac (WBC), alleging it mis-sold consumer credit insurance (CCI)
- ASIC said the breaches occurred in 2015 from April 7 to July 18, and relate to add-on insurance sold to roughly 384 customers
- As a result, ASIC is seeking declarations of the contraventions as well as unspecified monetary penalties
- The proceedings follow an in-depth review that examined the sale of CCI among 11 major banks and other lenders, which found that the design and sale of CCI had consistently failed consumers
- A date for the case has not yet been set and Westpac said it has not sold CCI products since 2019
- Westpac is up 1.65 per cent to $25.25 per share
Australia’s financial watchdog has launched civil penalty proceedings in the Federal Court against Westpac (WBC), alleging it mis-sold consumer credit insurance (CCI) to customers who had not agreed to the policies.
The Australian Securities and Investments Commission said the breaches occurred in 2015 from April 7 to July 18, and relate to add-on insurance sold to roughly 384 customers, which provides cover if they are unable to meet their credit card repayments.
In a statement released this morning, ASIC said Westpac “made false or misleading representations”, “failed to ensure that its financial services were provided efficiently, honestly and fairly” and “failed to comply with financial services laws”.
As a result, ASIC is seeking declarations of the contraventions as well as unspecified monetary penalties.
It’s part of the regulator’s priority to address consumer harms in insurance and follows an in-depth review that examined the sale of CCI among 11 major banks and other lenders.
ASIC’s report, “Consumer credit insurance: Poor value products and harmful sales practices”, published in 2019, found that the design and sale of CCI had consistently failed consumers who were being incorrectly charged.
“ASIC’s deep dive investigations in late 2018 and into 2019 found lenders had disappointingly not changed policies and conduct to stem harms from the design and sale of CCI,” said ASIC’s Deputy Chair Karen Chester.
“As a result, we’ve commenced civil proceedings against Westpac.”
While a date for the case has not yet been set, Westpac said it “is carefully considering these claims and is committed to working constructively with ASIC through the Court process”.
The bank also stressed that it has not sold CCI products since 2019.
Westpac is up 1.65 per cent to $25.25 per share at 1:10pm AEST.