Westpac is facing a class action against two of its subsidiary companies for allegedly short-changing members of its superannuation funds.
The latest class action, filed by Slater and Gordon, is against Westpac’s subsidiary companies BT Funds Management and Westpac Life Insurance Services.
The action relates to aspects of BTFM’s BT Super for Life cash investment option, with the damages sought by the claim unspecified at the time.
Slater and Gordon filed the class action on behalf of superannuation members who were short-changed by the bank’s super funds and is the third class action to be filed by the law firm as part of its Get Your Super Back campaign.
The case alleges BT was short-changing its members who invested in the super for life cash-only option by investing through Westpac Life and allowing it to earn substantial fees for providing no valuable service.
BT, rather than directly investing funds, chose to use Westpac Life as an intermediary, which then invested the money in an externally managed cash fund.
Special counsel Nathan Rapoport at Slater and Gordon said Westpac Life was given discretion about the rates that it would pass on to members and at times kept almost half of the returns.
“Superannuation members trusted BT with their retirement savings, but instead of seeking the best returns available for members, it appears BT chose to line the pockets of another entity in the Westpac group at the expense of its members,” Mr Rapoport said.
Mr Rapport said Westpac Life achieved reasonable returns on money, but the arrangement meant they kept most of the benefit for itself.
“We believe Westpac Life provided no service that could justify it retaining such a large part of the returns generated from members’ money, and we want the difference paid back to members.”
Both BT Funds Management and Westpac Life Insurance Services said they would be defending the claims in an ASX release.
The legal action is the latest against the bank, which is also fighting off a Maurice Blackburn class action in relation to alleged breaches of responsible lending obligations under the Consumer Credit Protection Act.
Westpac recently did have a win as ASIC’s case against the bank over lending laws was dismissed by the Federal Court in August.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
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