On Monday, the bank acknowledged the penalty that it fully provisioned in its first-half 2021 account.
The penalty relates to proceedings brought by ASIC in 2016 against Westpac and BT, where “personal advice” was found to have been provided by call centre staff to 14 customers.
The staff advised each person to accept an offer to roll over their external superannuation accounts into their account with the big four bank.
“We take our obligations to our customers very seriously,” a Westpac spokesperson told ifa.
“This was a test case brought by ASIC against Westpac Securities Administration Limited and BT Funds Management Limited in relation to 14 customers concerning the rollover of their superannuation accounts.
“It was an important process for the financial services industry to provide clarity on the distinction between the provision of ‘personal’ and ‘general’ advice when speaking with our customers.
“The findings in this case have provided that clarity.”
It comes after Westpac lost its appeal against a Full Court decision in February.
“Westpac was actively conducting a sales campaign aimed at rolling customers from their existing superannuation accounts into Westpac superannuation products. In doing this, Westpac failed to act in the best interests of their customers,” ASIC Commissioner Danielle Press said.
“Consumers’ decisions about their superannuation are significant long-term financial decisions affecting their retirement income. Financial institutions seeking to influence those decisions by providing financial product advice, must comply with the law designed to protect consumers.
“The penalty of $10.5 million handed down related to calls made to just 14 consumers and should act as a strong deterrent to any entity breaching these provisions of the law.”
Earlier this month, ASIC conceded that the advice sector had been charged for a proportion of its High Court case against Westpac, saying actions related to unlicensed conduct were “in the interests of licensed participants in [the advice] sector, because it maintains integrity and trust in the licensed sector and deters competition from unlicensed and unregulated competitors”.
The regulator’s figures showed that 60 per cent of costs in the case had been charged to the advice sector, while 40 per cent had been charged to the super sector.
Can you imagine the mess if ASIC went back through recorded conversations between Industry Fund staff and their members and non members enquiring over the last 7 years and determined the volume of personalised advice provided over the phone????
The fine would be astronomical for thousands of breaches on a daily basis.
Maybe the Industry Funds could claw back some of the tens and tens of millions they have
“donated” to big unions through re-directed Directors Fees in order to pay the bill.
ASIC appear very reluctant to approach this area firstly because is sheer bias and secondly because they well know how massive this would be.
A bit hard when you have recommended an Industry Fund as your default option for your very own staff to then go and prosecute them for breaches of advice protocol.
Yet I am paying for the court case, hardly seems fair.
Consolidated revenue will be happy to hear that.
14 customers, and the fine is $10.5 million?
How many people has Barefoot advised?
On the positive side, this should pay my ASIC levy for me for years – LOL.
Sadly, not even a gold coin donation will be made to reduce your portion of the levy…
why isn’t this money used to offset the cost of the case?
why do ASIC charge advisers seperately for the cost of litigation?
where does this fine go?
Scotties PR Fund?
Scotty’s parking lots. And celebrity endorsed Covid ads.
Will ASIC get legal costs from Westpac and if so will they refund to advisers the exorbitant fees charged which were raised “to cover the Westpac action”?
ASIC are charging compliance fees to advisers, who were not employed by Westpac. Incredible.
Great news! but isn’t it about time so of the industry fund call centre were investigated over the same issue. Oh wait sorry i forgot; they can do no wrong
$10mill for 14 customers! Imagine union super’s penalty when ASIC pursue them for the thousands of clients that received this form of ‘advice’ from telephone reps, union reps and basically anyone keen to earn some referral commission!!
That $10.5 million Westpac fine for illegal super advice is a pretty stiff penalty and well done by ASIC in every way except one…