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ANTHONY KLAN
One of Australia’s biggest banks, Westpac, has been caught fleecing over $10 million from 11,000 of its customers by charging for “financial advice” that it never actually provided - because they were dead.
Action by the corporate regulator reveals Westpac employees and executives have engaged in widespread illegality, with around $80 million fleeced from “many thousands of customers” over “many years”, yet not one person will be jailed for the crimes - or even face as much as a $1 fine.
The Australian Securities and Investments Commission today said it had launched “multiple actions against Westpac” in the Federal Court for “widespread compliance failures” across “multiple Westpac businesses” in alleged conduct that “occurred over many years”.
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The illegal actions - over 80,000 of which have been identified - “caused widespread consumer harm” and “ranged across Westpac’s everyday banking, financial advice, superannuation and insurance businesses”.
The illegality was so widespread that ASIC took the “unprecedented” step of filing “multiple proceedings” against the “same respondent at the same time,” ASIC Deputy Chair Sarah Court said in statement.
“These were exceptional circumstances,” Court said.
Yet despite those “exceptional circumstances” - and Westpac having admitted to all of the allegations - ASIC has failed to take any action - criminal or civil - against a single Westpac employee or executive who actually broke the law.
That’s despite ASIC having identified over 88,000 legal breaches.
That means that no individuals will be held to account - or be forced to even pay a fine - over the systematic illegality, which Westpac has fully admitted.
Instead it will be Westpac’s shareholders - including its “mum and dad” investors - who foot the bill.
““Westpac’s shareholders will foot the bill””
Westpac has been aggressively recruiting ASIC’s top brass. Source: The Klaxon
That includes around $80m “restitution” to customers and around $100m in “combined penalties” - a figure Westpac and ASIC have come up with between themselves, which they say they consider “appropriate”.
As revealed by The Klaxon in July, Westpac has been aggressively recruiting ASIC’s top brass and has at least ten former senior ASIC figures in its ranks.
They include ASIC’s former chief prosecutor; a former chief-of-staff to then ASIC chairman Greg Medcraft; a former senior ASIC forensic financial investigator; and a string of other former key ASIC litigators and enforcers.
The illegality revealed by ASIC is extremely serious and widespread.
Many of the legal breaches that Westpac employees and executives have engaged in - Westpac has fully admitted that the wrongdoing occurred - carry extensive jail terms.
The illegality includes:
- Charging $10m to “over 11,000 deceased customers” for “financial advice services that were not provided due to their death”
- Charging 7,000 customers for multiple insurance policies it had needlessly issued over “the same property at the same time”
- Charging over 8,000 superannuation customers $12m in illegal life insurance commissions and for “financial advisors” they’d specifically elected against
- Charging at least 25,000 financial customers “over $7m” in hidden or inadequately disclosed fees
- Charging fees on 21,000 deregistered company accounts it had improperly allowed to remain open
- Charging 16,000 credit card and “flexi-loan debt” customers, who were “likely to be in financial distress”, higher interest rates than Westpac was legally allowed
“ASIC further alleges that in all matters, excluding Debt on-sale and Insurance in super, Westpac failed to ensure that its financial services were provided efficiently honestly and fairly,” ASIC says.
The Klaxon has approached ASIC seeking a response as to why its executive chose to take zero criminal or civil actions against any Westpac employees or executives over the extensive crimes, which Westpac has admitted to.
We are awaiting a response.
More to come…
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Welcome
Editor, Anthony Klan
Australian journalism is under threat like never before. So too is the ability for us, the public, to make informed decisions. A disintegrating media is serving to further concentrate the already vast, unhealthy, power held by a few. That power is routinely abused, its attendant responsibilities wilfully ignored, and our democracy weakened.
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Anthony Klan
Editor, The Klaxon
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