‘Grossly negligent’: Westpac cops $26 million penalty
Westpac has been fined $26 million for grossly negligent conduct after failing to respond to customers in financial distress.
On Tuesday, Federal Court Judge Tim McEvoy found that the bank’s conduct, although not intentional, occurred over a relatively long period from 2017 to 2023.
The Australian Securities and Investments Commission began pursuing Westpac in 2023 after it was found that the bank failed to respond to more than 200 online distress requests from customers over a six-year period.
Judge McEvoy found the requests were made by customers of Westpac and its subsidiaries St George Bank, Bank SA and Bank of Melbourne.
Customers were struggling to make repayments on mortgages, credit cards, personal loans, car loans and other obligations.
“I accept that Westpac’s breaches in this case were very serious,” Judge McEvoy said.
“These affected many vulnerable customers and persisted for a long period of time. In fact, it can be argued that the circumstances faced by affected customers mean that their financial vulnerability cannot be overstated.
“While it was not suggested that the breaches were intentional and instead resulted from inadequate systems and operational errors, I accepted that they amounted to gross negligence.”
ASIC deputy chairman Sarah Court said the penalty sent a clear message to Westpac and other lenders that they needed to respond better to customers seeking help.
“Westpac failed customers who needed help when they needed it most. These were customers who wanted some breathing room for a variety of reasons, including domestic violence, natural disasters, serious illness or job loss,” he said.
“Rather than providing a safety net for these customers, Westpac’s systemic failures have allowed them to slip through the cracks.”
Westpac was ordered to pay the regulator’s costs.
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