- High Court orders Westpac NZ to pay $3.25m over historic breaches
- The bank admitted the breaches and reported itself to the Financial Markets Authority
- Westpac is New Zealand’s fourth-biggest bank by total assets
One of the country’s biggest banks has been ordered to pay a multimillion-dollar penalty for misleading and overcharging customers.
The High Court has fined Westpac New Zealand $3.25 million for misleading customers entitled to advertised discounts, and for overcharging some business customers.
The historic breaches resulted in $6.35 million in overcharges and affect nearly 25,000 customers.
Westpac admitted the breaches in a civil case brought against it by the Financial Markets Authority at the High Court in Auckland in December last year.
The FMA said customers entitled to various benefits under its Employee, Gold and Platinum (EGP) packages failed to receive the advertised discounts.
The EGP packages were offered between February 2004 and November 2021.
The FMA also said personal and business banking customers did not receive benefits under one of Westpac’s other advertised packages, called Association Packages.
The watchdog also said Westpac failed to honour agreed pricing for business customers who held Business Transact Accounts.
As of December 31 last year, Reserve Bank data showed Westpac was New Zealand’s fourth-largest bank by total assets.
It made a profit of $1.05 billion for the year ended September.
“Westpac’s issues stemmed from deficiencies in its systems that meant the bank failed to deliver contractually agreed discounts to customers,” FMA head of enforcement Margot Gatland said.
Justice Geoffrey Venning issued a 35% discount to the penalty, noting the bank self-identified the issues and reported itself to the FMA, and fully cooperated with the investigation.
“Westpac acknowledged responsibility for its failures from the outset and has been entirely open and cooperative with the FMA throughout the investigation, admitting liability at the earliest stage,” the judge said.
A Westpac spokesperson said all customers had been remediated and it no longer offered the packages.
“Westpac co-operated fully with the FMA’s investigation and we are pleased to have resolved the matter.”
