The Federal Court of Australia has fined Westpac $10.5 million in a personal advice court case brought by the corporate watchdog.
The penalty relates to proceedings brought by the Australian Securities and Investment Commission 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 a Westpac-related account.
“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,” said ASIC commissioner Danielle Press.
“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.
Press said the penalty should act as a strong deterrent to any entity breaching these provisions of the law.
As a result of the campaigns conducted by Westpac, the corporate regulator said the bank it increased its funds under management by almost $650 million between 1 January 2013 and 16 September 2016.
During the campaign period, more than 30,000 customers deposited funds into Westpac superannuation accounts.
On 21 December 2018, the Federal Court found that Westpac Securities and BT Funds breached their obligation under the Corporations Act to act honestly, efficiently and fairly, but that ASIC did not make out its case that personal advice was provided to 15 customers.
On 28 October 2019, the Full Court of the Federal Court of Australia reversed the decision and unanimously found that personal advice had been given to 14 customers.