Tuesday 6th August 2019
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Westpac is to refund $7 million to 93,000 New Zealand customers overcharged due to incorrect calculation of rewards and fee-waivers on some accounts.
Westpac says about 61,000 customers were owed $1.28 million due to fee waivers being incorrectly applied to tertiary or graduate banking accounts between 2007 and 2017. A further $5.7 million is owned to about 32,000 customers who didn't receive the correct relationship rewards, as disclosed by the bank earlier this year.
“We apologise to all the customers affected, most of whom we have already refunded,” said Gina Dellabarca, Westpac New Zealand’s acting general manager of consumer banking and wealth.
“In most instances, the individual amounts are small and are the result of errors in manual processes. We want to assure our customers that we have now changed our systems so that the issue does not occur again.”
The refunds are part of a set of enforceable undertakings the bank has made with the Financial Markets Authority and the Commerce Commission.
In a joint statement, the regulators noted that Westpac had disclosed to them in December 2017 that it had not been applying discounts for some customers properly. More impacted customers were identified during the following 12 months.
“The bank has agreed to refund all fees and charges that have been incorrectly charged and will take all reasonable steps to reach impacted customers.”
The affected banking packages included Westpac’s Tertiary Pac, Career Starter Pac, Graduate Pac, International Student Pac, Relationship Rewards Scheme, Family Benefits and Westpac Staff Package, Bizpac, and Government Packages and Portfolio Package.
Westpac’s failings mean it potentially breached the fair dealing provisions of the Financial Markets Conduct Act and the consumer credit provisions of the Fair Trading Act.
Liam Mason, the FMA’s director of regulation, said it expects market participants to be proactive in this sort of situation.
“Westpac recognised its possible breaches and approached us and the Commerce Commission.”
Commission chair Anna Rawlings said it is important that firms have robust systems and sound monitoring practices to help avoid errors, and to quickly identify and fix them if they occur.
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