Regulator seeking declarations and pecuniary penalties
The Australian Securities & Investments Commission has commenced civil penalty proceedings in the Federal Court against Westpac Banking Corporation over the lender’s alleged mis-selling of consumer credit insurance (CCI).
ASIC, which is seeking declarations and pecuniary penalties from the court, is accusing Westpac of having committed the following acts from April 07, 2015 to July 28, 2015: making false or misleading representations that customers had agreed to acquire, were liable to pay for, and that the bank had a right to charge for CCI; asserting a right to payment for the premiums which customers were not liable to pay; failing to ensure that Westpac’s financial services were provided efficiently, honestly, and fairly when it supplied CCI; and failing to comply with the ASIC Act.
The regulator’s action relates to Westpac’s Credit Card Repayment Protection and Flexi-Loan Repayment Protection policies, and forms part of ASIC’s priority to address consumer harms in insurance following its detailed review of the sale of CCI by lenders.
“ASIC’s deep dive investigations in late 2018 and into 2019 found lenders had disappointingly not changed policies and conduct to stem harms from the design and sale of CCI,” said ASIC deputy chair Karen Chester. “As a result, we’ve commenced civil proceedings against Westpac.
“In addition to our enforcement action, ASIC has secured over $250 million of remediation for the consumers harmed by the practices of the offending lenders. The CCI remediation programme covers 11 major banks and other lenders and has returned on average over $430 to over 580,000 consumers.”
Meanwhile, the date for the first case management hearing is yet to be scheduled by the Federal Court.