One of the big four banks has refunded approximately $9.2 million to 161,414 customers following a failure to waive fees over a six-year period.
In a statement released yesterday, ASIC said Westpac has refunded approximately $9.2 million to customers after failing to waive fees on Westpac and St.George branded savings and transactions accounts.
For customers aged under 21 years, Westpac relied on staff to manually apply a monthly service fee waiver for customers with a Westpac Choice transaction account and a withdrawal fee waiver for customers with a Westpac Reward Saver account.
However, between May 2007 and April 2013, 133,045 Westpac Choice and Westpac Reward Saver accounts were opened for some eligible customers without the relevant fee waivers being applied.
A further 28,369 customers under the age of 18 who were eligible for a St.George Complete Freedom Student transaction account (which has no monthly service fee), instead held a standard St.George transaction account which charged a monthly fee.
ASIC deputy chairman Peter Kell remarked: “Financial institutions that offer products with benefits such as fee waivers must have effective and robust systems in place to deliver the promised benefits to consumers.
“Businesses that rely on manual processes to apply waivers, discounts and other benefits should carefully consider how they manage the risks of processes not being followed, including having appropriate controls and procedures in place,” Mr Kell added.
Westpac has now provided refunds to affected customers, including an additional amount reflecting interest.
The bank is also enhancing its account opening processes for these Westpac and St.George products, including automated application of the relevant fee waivers based on the customer’s date of birth.
[Related: ING Direct to refund $5.38m in super fees]