Australia’s third-largest lender has admitted six civil lawsuits filed by the country’s securities regulator, including allegations against its banking, retirement, wealth management and now-ceded general insurance unit business.
The Australian Securities and Investments Commission alleged that Westpac was accused of Australian $ 10 million ($ 7.2 million) in advisory fees to over 11,000 deceased people and distribution of duplicate insurance policies to over 7,000 clients.
These breaches took place over a 10-year period, ASIC said.
Australia’s financial sector has come under intense scrutiny since a 2018 Royal Commission investigation revealed widespread shortcomings in the industry, with deaths among the most common and damaging revelations.
ASIC and Westpac will jointly propose the A $ 113 million penalty in federal court, and the lender will remedy around A $ 80 million ($ 57 million) to customers, ASIC said.
“The conduct and alleged violations in these proceedings have caused widespread harm to consumers and have affected Westpac’s daily banking, financial advisory, pension and insurance business,” said the ASIC Vice President, Sarah Court.
“Westpac urgently needs to improve its systems and culture to ensure that these systemic failures do not continue. “
She added that “it is unprecedented for ASIC to initiate multiple proceedings against the same defendant at the same time.”
Last week, the Reserve Bank of New Zealand said Westpac’s local unit needed to address risk governance and compliance issues after an independent report found “significant gaps” in oversight from the administration board.