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Westpac to pay AUD113m fine on six regulatory breaches

By Debabrata Das

07:23, 30 November 2021

Facade of Westpac’s flagship branch in Melbourne
Facade of Westpac’s flagship branch in Melbourne - Photo: Shutterstock

One of the big four Australian banks, Westpac, has agreed to pay fines totalling AUD113m ($80.29m) for six regulatory breaches, including one for charging 11,000 dead customers fees.

Australian Securities and Investments Commissions has started six civil penalty proceedings for each of the breaches. ASIC deputy chair Sarah Court said in a statement on Tuesday that it is “unprecedented for ASIC to file multiple proceedings against the same respondent at the same time” but added that it had to do so because of “exceptional circumstances”.

Westpac added in its statement that it and ASIC had agreed to jointly submit the penalties for each of the proceedings.

Bank falls short of standards

“In each of these matters, Westpac has fallen short of our standards and the standards that the customers expect of us…This outcome is an important step forward for us as we continue to fix issues and build stronger risk foundations,” said Peter King, Westpac CEO, in a statement.


2,036.29 Price
-0.400% 1D Chg, %
Long position overnight fee -0.0196%
Short position overnight fee 0.0114%
Overnight fee time 22:00 (UTC)
Spread 0.30


15,935.10 Price
-0.390% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8


0.61 Price
-0.060% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

Oil - Crude

75.77 Price
-2.580% 1D Chg, %
Long position overnight fee -0.0165%
Short position overnight fee -0.0054%
Overnight fee time 22:00 (UTC)
Spread 0.040

Apart from charging dead customers, ASIC also filed civil penalty proceedings against Westpac for distributing duplicate insurance policies to over 7,000 customers. Further, Westpac subsidiary BT Funds Management was also found charging member insurance premiums that included commission payments, despite commissions having been banned.

Another proceeding relates to Westpac licensees BT Financial Advice, Securitor and Magnitude, all of which are no long operational, charging ongoing contribution fees for financial advice to customers without proper disclosure. Westpac was also found to have been lacking appropriate processes to manage accounts held in the names of deregistered companies. Finally, Westpac was also penalised for selling consumer credit card and flex-loan debt to debt purchasers with incorrect interest rates.

Stock price falls

Following the announcement, Westpac’s stock price fell nearly 2% to close at AUD20.52.

Read more: Investors snub buyback to dump Westpac on poor earnings

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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