Westpac to pay $4m to customers it overcharged for Aussie dollars
Westpac self-reported a potential breach of the Fair Trading Act to the Commerce Commission and the Financial Markets Authority in late 2014.
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Westpac Banking Corp's New Zealand unit will pay more than $4 million in compensation after overcharging customers who used debit cards to withdraw cash from its ATM machines in Australia.
Westpac New Zealand self-reported a potential breach of the Fair Trading Act to the Commerce Commission and the Financial Markets Authority in late 2014, the Wellington-based regulator said in a statement.
The bank told its customers Australian ATM transactions would be processed and converted into New Zealand dollars using a rate of exchange fixed by card schemes such as Visa or Mastercard. However, between October 2012 and August 2014, Westpac charged a higher rate of exchange than that fixed by the card schemes.
At the time Westpac was overcharging, the commission still had primary jurisdiction for any misleading or deceptive conduct in the financial sector but this was passed to the FMA in April 2014.
As part of its settlement, Westpac will seek to compensate about 108,000 former and current customers who were overcharged more than $5. An additional 60,000 customers were overcharged less than $5, and the sum attributed to this group – just over $125,000 – will be donated to the Mangere Budgeting Services Trust. Any balance remaining as a result of Westpac being unable to contact and compensate former customers, including deceased customers, will also be donated to the trust.
Commissioner Anna Rawlings said they were pleased Westpac had proactively informed regulators to ensure the matter was properly resolved.
"Having reviewed Westpac's internal investigation and the information they have provided us, we are satisfied they did not set out to mislead their customers," Rawlings said. "While the overcharged fees are small for individuals, cumulatively it could have generated several million dollars in profit for Westpac."
(BusinessDesk)
Sophie Boot
Tue, 16 Feb 2016
Tue, 16 Feb 2016
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Westpac to pay $4m to customers it overcharged for Aussie dollars
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