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Major bank to refund customers $65 million

WESTPAC will pay back $65 million after confessing it has short-changed 200,000 customers who missed out on discounts they should have received.

The bank has this afternoon revealed some customers who have held Premier Advantage Packages with Westpac - or Advantage Packages with offshoots Bank of Melbourne, St George and BankSA - since 2010 were affected.

The bank said customers had been asked to "opt in" for discounts they should have received automatically.

Westpac consumer chief George Frazis says the bank notified the corporate watchdog after identifying the error.
Westpac consumer chief George Frazis says the bank notified the corporate watchdog after identifying the error.

Customers who were meant to save thousands of dollars on products such as home and contents insurance and term deposits missed out, the bank revealed.

"Customers do not need to do anything," Westpac consumer chief George Frazis said.

"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.

"The packages have since been simplified and all benefits are now automated."

Mr Frazis said other components of the deal - including discounts on home loans and credit card rates, or lower costs for transaction accounts - had been applied correctly.

The after-tax cost to Westpac is expected to clock in at $45 million.
The after-tax cost to Westpac is expected to clock in at $45 million.

The bank consulted the corporate watchdog, the Australian Securities and Investments Commission, when it found the problem.

"When we identified these issues we started the process of putting things right for customers. We also notified ASIC," Mr Frazis said.

"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."

Refunds are expected to total about $65 million, with an after-tax cost to Westpac of about $45 million, which will be included in results for Westpac's financial year ending last month.

jeff.whalley@news.com.au

Topics:  bank editors picks money



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