Big four bank prepares to pay back $87m to customers

Westpac has announced that it will pay approximately $87 million in compensation to former clients of the bank’s financial advice businesses, and those who held ASX-listed securities through the bank’s platforms, for failing to notify them of corporate actions between 2005 and 2019.

The Australian Securities and Investments Commission (ASIC) explained that Westpac’s failure to notify customers of corporate actions meant that these customers could have missed out on various opportunities.

Some of the opportunities clients could have missed out on included purchasing additional shares at a discount, the creation of temporary rights or options that could be sold at a profit and the ability to sell shares and receive a benefit that could provide tax advantages.

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The remediation will be paid to approximately 32,000 customer accounts, according to ASIC, with the remediation covering an estimated 328,000 potential missed corporate action notifications.

Westpac says that it aims to compensate most of the affected customers by the end of 2021 and customers will also be informed of missed corporate action notifications where Westpac has determined that no compensation is payable.

ASIC commissioner Danielle Press said it was now important for customers to check if they were due some compensation from Westpac.

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“Compensating customers affected by misconduct is a very important part of licensees’ obligations to act fairly, honestly and efficiently,” Ms Press said.

“We are pleased to see that Westpac has taken action to remediate affected customers, regardless of how much time has passed.

“We encourage affected customers to engage with the communications from Westpac to understand how they were impacted and to seek further information from Westpac if required.”

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Westpac first reported its failure to notify customers of corporate actions to ASIC in July 2019 and provided further information on the scale and significance of the issue in April 2020.

Westpac’s advice businesses involved in the remediation include Securitor Financial Group Limited, Magnitude Group Pty Ltd and Westpac Banking Corporation (known as BT Financial Advice). These businesses ceased providing personal financial advice in 2019.

As YourLifeChoices reported on Thursday, the federal government has come under fire for failing to pass laws to establish a compensation scheme.

“Across Australia, victims of misconduct in the financial system continue to be left out of pocket,” CHOICE chief executive Alan Kirkland said.

“Some families are waiting on hundreds of thousands of dollars of compensation that can’t be paid until the scheme is up and running.

“These delays only add to the financial and emotional hardship suffered by these people.”

Did you get financial advice from a Westpac-affiliated company between 2005 and 2019? Do you think you will be entitled to compensation? Why not share your thoughts in the comments section below?

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Written by Ben Hocking

Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.

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