It was revealed Monday that Westpac New Zealand has admitted to misleading 24,621 customers and overcharging them a total of NZ$6.35 million due to systemic failures in delivering advertised discounts and benefits.
Westpac New Zealand Admits to Misleading and Overcharging Over 24,000 Customers
The admissions were made in civil proceedings brought by the Financial Markets Authority (FMA) in the High Court in Auckland.
The issues centred on three package types, including Employee, Gold, and Platinum (EGP) packages, as well as personal and business banking packages.
Customers entitled to various benefits under the schemes frequently did not receive the advertised benefits, according to New Zealand’s financial regulator.
The discrepancies are said to have arisen from manual processes and a lack of internal oversight.
The issues are said to have impacted up to 43% of eligible personal customers and 32% of business customers. “The result was that customers were overcharged and misled,” said New Zealand’s Financial Markets Authority.
Small business customers holding “Business Transact Accounts” (BTAs) were also impacted.
Westpac is said to have applied incorrect pricing codes, leading to higher account maintenance fees and missed fee waivers. In all cases, the errors were reflected in misleading customer statements, which implied that correct pricing had been applied.
FMA Head of Enforcement Margot Gatland stated, “Westpac used preferential pricing to attract and retain customers, without having systems that could reliably deliver on those promises.”
Westpac has since remediated affected customers. The bank is said to have cooperated fully with the FMA’s investigation.
A penalty hearing in the High Court will likely take place in 2025.
