After being slammed with six cases by authorities for its terrible treatment of clients, including charging fees to dead persons, Australian banking behemoth Westpac has acknowledged to breaching the law.
It will pay a penalty of $81 million (A$113 million; £61 million), subject to court approval.
Customers will get $57 million in compensation from the bank.
Westpac has to address its “poor compliance culture,” according to the Australian Securities and Investments Commission (ASIC).
ASIC Deputy Chair Sarah Court stated, “The conduct and breaches claimed in these proceedings caused extensive consumer harm and stretched throughout Westpac’s everyday banking, financial advising, superannuation, and insurance businesses.”
The Australian Securities and Investments Commission (ASIC) said one of the six investigations revealed the bank had charged more than $7 million in fees to more than 11,000 “dead clients for financial advising services that were not supplied owing to their death” over a 10-year period.
Westpac also allegedly delivered duplicate insurance policies to over 7,000 clients, requiring them to pay for two or more policies unnecessarily.
It was also estimated that at least 25,000 consumers were charged over $5 million in surcharges that were not appropriately disclosed.
Westpac has conceded the claims made in federal court, according to ASIC.
“In each of these areas, Westpac has fallen short of our expectations and those of our consumers.”
“These problems should not have happened, and our procedures, systems, and monitoring should have been better. We are correcting the situation and sincerely apologize to our clients “Peter King, Westpac’s CEO, said in a statement.
It’s the bank’s next severe regulatory setback. It agreed to pay a record $930 million penalties in September of last year for the country’s largest ever money laundering violation.
Following the bank’s involvement in the money-laundering incident the previous year, Westpac’s then-chief executive Brian Hartzer stepped down.
A national commission into Australia’s scandal-plagued financial sector suggested significant changes to the industry in an attempt to curb persistent misbehavior in the same year.
The Royal Commission, Australia’s highest form of public inquiry, investigated misconduct by some of the country’s most powerful institutions for a year.
It came after a decade of scandals that damaged Australia’s largest industry’s confidence.