Federal Court levies penalty for charging improper commissions
Westpac must pay $20 million in court penalties for charging improper commissions to more than 9,000 superannuation customers.
The case is one of six filed against Westpac in November by the Australian Securities and Investments Commission, and the first of the six to receive judgment.
On Friday, the Federal Court levied the penalty against Westpac unit BT Funds Management for charging members insurance premiums that included commissions, despite those commissions being banned in 2013, The Australian reported. BT Funds Management continued to charge the commissions until 2020 through an Asgard fund.
Some members were also charged commissions through premiums paid to financial advisors, even though those customers had chosen not to receive financial advice. The Federal Court also found that BT misrepresented to members that proper deductions had been made, despite the commissions having been banned for years, The Australian reported.
“Over 9,000 Asgard Fund members were incorrectly charged commission payments totaling more than $9 million,” ASIC deputy chair Sarah Court said in a statement. “This misconduct was caused by the failure to implement proper systems to ensure consumers are correctly charged. As the court finalises these matters against Westpac, we urge Westpac and other financial institutions to look at their culture of compliance and invest in systems that mean incorrect charging of fees, premiums and commissions does not occur.”
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ASIC said that Westpac has indicated it will pay more than $9.8 million in compensation to more than 9,900 superannuation members by July, according to The Australian.
When the six cases were filed simultaneously in November, Court said that filing multiple proceedings against a single institution at the same time was “unprecedented.”
“However, these are exceptional circumstances,” she said. “ASIC had numerous Westpac-related matters under investigation through the course of 2021, and we decided to expedite those matters for consideration by the court at the earliest opportunity.”
