Westpac refunds $9.2 million after charging extra fees
As a result, Westpac is automating its fee waiver process.
Westpac Banking Corporation has handed over approximately $9.2 million in refunds after failing to waive fees on some of its accounts.
The bank has paid compensation to 161,414 of its customers, plus interest, after they were charged fees on Westpac and St. George branded savings and transaction accounts between 2007 and 2013.
Previously, Westpac would rely on service staff to manually apply fee waiver benefits to some customers under 21 years of age.
This included a monthly service fee waiver for customers with a Westpac Choice transaction account and a withdrawal fee waiver for customers with a Westpac Reward Saver account.
There were 133,045 of these accounts opened without the relevant fee waivers applied.
A further 28,369 customers, aged under 18, were found to be eligible for a St. George Complete Freedom Student transaction account (no monthly fees) but instead held regular transaction accounts that charged a monthly fee.
Westpac reported the incident to the Australian Securities & Investments Commission (ASIC) and says it will enhance its account opening process, incorporating automated applications of relevant fee waivers based on a customer's date of birth submitted during the application process.
This multi-million dollar refund is the latest in a string of ASIC-enforced retributions.
Last week, Westpac refunded $20 million to 820,000 customers after incorrectly charging foreign transaction fees.
Also this month, ING handed over $5.38 million to around 24,500 members after acknowledging some of its promotional material was potentially misleading, while ANZ refunded $28.8 million in fees to retail and business bank customers after charging unnecessary periodical payments.
These decisions highlight the importance of selecting a bank account that minimises fees and costs.
If you make frequent overseas purchases, shop around for cards that offer no foreign transaction fees.