Lets see if Westpac gets placed on suspension by the ASX until an outcome is reached from the legal proceedings. If not, I would like to petition for a royal commission in to the questionable practices of ASXThursday 8 April 2021
21-066MR ASIC commences proceedings against Westpac for alleged misleading and unfair sales of consumer credit insurance
ASIC has commenced civil penalty proceedings in the Federal Court against Westpac Banking Corporation (Westpac), alleging it mis-sold consumer credit insurance (CCI) with credit cards, and other credit facilities, to customers who had not agreed to buy the policies.
ASIC’s action relates to Westpac’s Credit Card Repayment Protection and Flexi-Loan Repayment Protection policies which are add-on insurance products sold with credit cards and lines of credit.
ASIC alleges that from 7 April 2015 to 28 July 2015, Westpac:
- made false or misleading representations that customers had agreed to acquire, were liable to pay for and that Westpac had a right to charge for, CCI;
- asserted a right to payment for the CCI premiums which customers were not liable to pay;
- failed to ensure that its financial services were provided efficiently, honestly and fairly when it supplied CCI to customers who had not agreed to acquire CCI and debited premiums from those customers’ accounts; and
- failed to comply with financial services laws, being the ASIC Act.
ASIC is seeking declarations and pecuniary penalties from the Federal Court.
The date for the first case management hearing is yet to be scheduled by the Court.
This action forms part of ASIC’s priority to address consumer harms in insurance. It follows a detailed ASIC review of the sale of CCI by 11 major banks and other lenders. ASIC’sReport 622,Consumer credit insurance: Poor value products and harmful sales practices, published in July 2019, revealed that the design and sale of CCI had consistently failed consumers. ASIC found that CCI was poor value, CCI sales practices and product design caused consumer harm and consumers were being incorrectly charged for CCI (19-180MR).
ASIC Deputy Chair Karen Chester said, ‘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. 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 program covers 11 major banks and other lenders and has returned on average over $430 to over 580,000 consumers. Our trifecta of regulatory action - our 2019 report, targeted investigations to initiate enforcement action and remediation - collectively brings transparency, deterrence and rectification to CCI misconduct.
‘ASIC will continue to take action where we identify potential breaches of the law where the design and sale of financial products to consumers fails the litmus test of section 912A – efficiency, honesty and fairness.’
Download
Concise statement (PDF 311 KB)
Originating process (PDF 276 KB)
Background
In May 2020, ASIC announced that its work had led to over $160 million in remediation for consumers sold junk CCI by lenders, including Westpac (20-115MR). ASIC continues to monitor ongoing remediation by the sector, which has collectively now exceeded $250 million.
ASIC’sReport 256,Consumer credit insurance: A review of sales practices by authorised deposit-taking institutions, published in October 2011, made 10 recommendations to reduce the risk of CCI being mis-sold to consumers.
ASIC’s follow upReport 622,Consumer credit insurance: Poor value products and harmful sales practices, published in July 2019, revealed that the design and sale of CCI had consistently failed consumers (19-180MR).
ASIC’s MoneySmart websitehas information aboutconsumer credit insurance and how it works.
