Westpac subsidiary BT Funds hit with $20 million penalty
However, the Australian Securities and Investments Commission (ASIC) found that BT Funds had charged the members of its Asgard Fund – one of its superannuation funds – insurance premiums that included commission payments until 2020, despite these commissions being banned under the Future of Financial Advice reforms since 2013. It had also charged Asgard Independence Plan Division Two members commissions via their premiums paid to financial advisers, even though the members had elected to remove the financial adviser component from their account.
Furthermore, the Federal Court found that BT Funds misrepresented to members in their periodic statements that it had made proper deductions, even though commissions were banned.
Westpac agreed on a statement of facts. Hence, the court ruled that BT Funds contravened both the Corporations Act and the ASIC Act, and the company promised to pay over $9.8 million in remediation to over 9,900 affected members by July 2022.
Read more: Westpac hit with $1.5 million penalty over consumer credit insurance dispute
The “insurance in super” matter was one of six civil penalty proceedings ASIC filed against Westpac in November 2021 (21-320MR), with the BT Funds case the first to receive judgment.
Commenting on the BT Funds case, ASIC Deputy Chair Sarah Court said: “Over 9,000 Asgard Fund members were incorrectly charged commission payments totalling more than $9 million. This misconduct was caused by the failure to implement proper systems to ensure consumers are correctly charged.”
Meanwhile, Justice Beach explained that the misconduct resulted from systems and processing errors and an inadequate risk management framework, and the inappropriate deduction of amounts based on false or misleading conduct eroded the superannuation balances of affected superannuation members.
The BT Funds ruling was announced after Westpac had been hit by a $1.5 million penalty over a consumer credit insurance dispute.
