Westpac is in court for allegedly providing financial advice during telephone sales calls to customers when it wasn’t allowed to do so.
The big four bank has been pinged under a campaign by corporate watchdog ASIC (Australian Securities and Investments Commission) on the conduct of the big banks when they provide financial advice.
ASIC launched Federal Court action against Westpac and its subsidiary BT Funds Management for allegedly failing the “best interests duty” rules introduced under the Future of Financial Advice reforms.
The major four banks have recently been caught up in a series of scandals involving providing poor financial advice and unjustly withholding insurance payouts. The four bank CEOs were also called before a parliamentary inquiry to explain why they hadn’t passed on interest rate cuts in full to their customers.
The latest civil penalty proceedings follow an ASIC investigation into telephone sales campaigns targeting superannuation fund members.
ASIC’s case sets out 15 examples of alleged contraventions of the “best interests duty” arising from two telephone campaigns by Westpac Securities Administration and BT Funds Management.
The two are alleged to have recommended that customers roll out of their other funds into their Westpac-related superannuation accounts.
However, both Westpac and BT are not permitted to provide personal financial product advice under their Australian financial services licences. ASIC also alleges they did not provide a proper comparison of the superannuation funds as required by law.
ASIC also alleges the two failed to do all things necessary to ensure that the financial services covered by their licences are provided efficiently, honestly and fairly.
The first hearing will be on February 2 in the Federal Court in Sydney.
These proceedings form part of ASIC’s Wealth Management Project started in Octoiber last year, focusing on the wealth divisions of the major banks, AMP and Macquarie.