Westpac has lost a High Court appeal over a breach of financial advice laws, after running a telephone campaign encouraging customers to roll over their superannuation savings into a bank-owned fund.
The High Court on Wednesday dismissed Westpac’s appeal over the long-running case, launched against the bank after it gained $650 million in extra funds under management through a call-out to customers that the bank claimed was a form of “general” financial advice.
The case against Westpac, launched by the Australian Securities and Investments Commission (ASIC), alleged the telephone sales campaign between 2013 and 2016 broke the law because customers were in fact given “personal” advice, which is required to be in the best interests of the customer.
The Federal Court ruled unanimously against the bank in a 2019 decision, but Westpac challenged in the country’s highest court by arguing the advice was general in nature.
The High Court on Wednesday unanimously rejected the lender’s appeal, with the Federal Court to determine a fine for the banking giant.
ASIC said the outcome would give the industry clarity on the difference between providing personal advice and more general advice that does not take into account a customer’s circumstances.
“Westpac were actively conducting a sales campaign aimed at rolling customers into Westpac products under the banner of general advice,” ASIC commissioner Danielle Press said.
The judgment from Chief Justice Susan Kiefel and Justices Virginia Bell, Stephen Gageler and Patrick Keane said the calls made by Westpac staff were presented to super fund members as helpful “courtesy calls”. Fund members could have expected the bank had taken members’ objectives into account in recommending the service, they said.
“This service was presented as an obvious and uncontroversial course of action for each particular member in respect of his or her BT account, having regard to the member’s objectives discussed during the call,” the judgment said.
Westpac said the matter was a test case brought by ASIC, adding that the bank took its obligations to customers seriously. “It was an important process for the financial services industry to provide clarity on the distinction between the provision of ‘personal and ‘general’ advice when speaking with our customers,” a bank spokeswoman said.
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Source: Thanks smh.com