News comes on the heels of "unprecedented" filing of six simultaneous actions against the bank
Westpac is set to settle a seventh Federal Court Case lodged by the Australian Securities and Investments Commission, this one involving the alleged mis-selling of consumer credit insurance (CCI) products.
ASIC alleged in April that Westpac mis-sold CCI with credit cards and other credit products to customers who hadn’t agreed to buy them, according to a report by The Australian. ASIC is reportedly seeking a financial penalty of less than $10 million in the case.
The news comes on the heels of ASIC launching six simultaneous actions against Westpac last month – a move ASIC deputy chair Sarah Court called “unprecedented.” However, ASIC said the simultaneous actions were necessary due to “widespread compliance failures across multiple Westpac businesses.”
The CCI case was reportedly separated from the other six cases because proceedings had already been lodged, according to The Australian. The cases followed separate ASIC investigations arising from the banking royal commission.
For the six cases lodged last month, Westpac has said it would remediate about $80 million to customers. The bank and ASIC will jointly submit to the Federal Court that combined penalties of $113 million are appropriate for the six cases.
“In each of these matters, Westpac has fallen short of our standards and the standards our customers expect of us,” Westpac CEO Peter King said in a statement. “The issues raised in these matters should not have occurred, and our processes, systems and monitoring should have been better. We are putting things right and unreservedly apologise to our customers.”
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The CCI case involves Westpac’s credit card repayment protection and flexi-loan repayment protection policies, The Australian reported. The policies were sold as add-on products with credit cards and personal lines of credit.
ASIC alleged that Westpac made false or misleading representations between April 2015 and July 2015 that customers had agreed to acquire CCI, and that the bank had a right to charge for it. ASIC also alleged that Westpac had failed to ensure its financial services were provided efficiently, honestly and fairly when it sold CCI products to customers who had not agreed to acquire them.
ASIC also alleged that Westpac failed to comply with financial services laws in the case, The Australian reported.
