Media Release
MR No. 2025 – 14
Westpac is to pay a penalty of $3.25 million for misleading customers entitled to advertised discounts as well as overcharging some of its business customers. Westpac admitted its conduct in civil proceedings brought by the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – at the High Court in Auckland in December 2024.
Westpac’s breaches of the fair dealing provisions under the Financial Markets Conduct Act 2013 (FMCA) affected a total of 24,621 customers and resulted in $6.35m in overcharges. Westpac admitted having made misrepresentations in respect of the following historic issues:
- Customers entitled to various benefits under Westpac’s Employee, Gold and Platinum (EGP) packages failed to receive the advertised discounts
- Personal and business banking customers failed to receive benefits under one of Westpac’s other advertised packaged arrangements
- Westpac failed to honour agreed pricing for business customers who held a “Business Transact Account”.
FMA Head of Enforcement, Margot Gatland, said, “Westpac’s issues stemmed from deficiencies in its systems that meant the bank failed to deliver contractually agreed discounts to their customers. Westpac used preferential pricing to attract and retain customers, without having systems that could reliably deliver on those promises.”
Westpac has remediated impacted customers. “The FMA acknowledges Westpac’s full cooperation throughout the FMA’s investigation, and the work it undertook to remedy the issues,” said Ms Gatland.
“The $3.25 million penalty against Westpac reflects the number of customers affected,” Ms Gatland said. “The relationship between financial institutions and their customers must be one of trust. Customers should rightfully expect to be treated fairly and that agreements between the two parties will be honoured.”
In his penalty decision Justice Venning said, “I accept Westpac’s submission there is no suggestion that its conduct was deliberate or wilfully misleading, nor that there was any intention to intentionally deprive customers of benefits. While it had in place systems, the systems were insufficient.”
ENDS
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Related
FMA v Westpac - Judgment [PDF 265KB]
Westpac admits to misleading representations that resulted in $6.35m in overcharges
