Financial Regulator Cracks Down on Westpac New Zealand
Thousands of Customers Affected by Misleading Practices
New Zealand’s financial watchdog, the Financial Markets Authority (FMA), has taken action against Westpac New Zealand, accusing the Australian lender’s local unit of overcharging and misleading over 24,000 personal and business customers. The regulator alleges that Westpac failed to provide advertised discounts and benefits, resulting in a staggering NZ$6.35 million ($3.59 million) in overcharges.
Systemic Failures Led to Customer Harm
According to the FMA, Westpac’s issues stemmed from deficiencies in its systems, which meant the bank failed to deliver contractually agreed discounts to its customers. Margot Gatland, the FMA’s head of enforcement, emphasized that Westpac’s failures had real consequences for its customers.
Remediation and Cooperation
In response to the allegations, Westpac has provided remediation to impacted customers and has agreed to resolve the proceedings on mutually agreeable terms. The bank has also cooperated fully with the FMA’s investigation, self-reporting the issues and working to rectify the situation.
Next Steps
The matter is expected to be heard in the High Court in Auckland in 2025. While the outcome is uncertain, one thing is clear: the FMA is committed to holding financial institutions accountable for their actions and protecting the interests of New Zealand consumers.
A Lesson in Accountability
The Westpac New Zealand case serves as a reminder that financial institutions must prioritize transparency and accountability. By taking swift action against Westpac, the FMA is sending a strong message to the industry: customers deserve better, and regulators will not tolerate misleading practices.
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