The bank has announced that it would provide refunds to some customers holding “packaged” accounts after identifying that some customers did not automatically receive benefits to which they were entitled.
The issue affected about 200,000 customers with Premier Advantage Packages with Westpac or Advantage Packages with St. George, BankSA or Bank of Melbourne from 2010.
Under the terms of the packages, customers were entitled to a range of benefits. For example, they automatically received discounts on core products such as home loans, credit cards or transaction accounts. However, some customers did not receive discounts on ancillary products such as home and contents insurance and term deposits.
The refunds will total around $65 million, with an after-tax cost of around $45 million.
The bank has said that these packages have since been simplified and all benefits are now automated, adding that it is “committed to an ongoing review of its products and services to make sure it ‘gets it right’ for customers”.
Westpac has said that it will “proactively” contact eligible customers, but has set up dedicated web pages for each of its banks to assist with any questions. Business customers can also contact their relationship banker directly.
Westpac’s chief executive for Consumer Bank, George Frazis, said: “At Westpac, our business depends on building long-term relationships with our customers. So when we get something wrong, we want our customers to have confidence that we will put it right.
“When we identified these issues, we started the process of putting things right for customers. We also notified ASIC.”
Mr Frazis continued: “Importantly, customers do not need to do anything. Over the coming months, we will provide refunds, including appropriate interest, to any customers who may have been entitled to a benefit but weren’t aware they needed to opt in.
“Westpac apologises unreservedly for a process that did not suit customers. By automating the discounts, we have ensured that our customers will not be affected in this way again.”
Annie Kane is the editor of Mortgage Business.
As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also a regular contributor to the Mortgage Business Uncut podcast.
Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.