Westpac pays price for boosting credit card limits

ASIC/regulation/credit/westpac/

20 January 2016
| By Nicholas |
image
image
expand image

Westpac credit card clients whose credit limits were adjusted without adequate consultation, may receive refunds as part of a remediation process the bank has committed to.

The bank agreed to enter into a remediation programme that includes "proactive customer refunds, and a contribution of $1 million over four years to support financial counselling and literacy", after the Australian Securities and Investments Commission (ASIC) flagged concerns over its processes for boosting credit card limits.

ASIC reported that "Westpac, in relying largely on its automated processes, was not making reasonable inquiries of individual cardholders," which was not consistent with the responsible lending obligations under the National Consumer Credit Protection Act 2009.

In response to ASIC's concerns, Westpac has committed to:

  • Changing its credit limit increase processes to ensure that, at a minimum, reasonable inquiries are made about a customer's income and employment status to ascertain their financial situation before the limit is increased;
  • A remediation program involving a review of credit limit increases previously provided where a cardholder experiences financial difficulty, with consumer refunds paid where appropriate; and
  • Engaging an independent external expert to provide assurance of the effectiveness of the remediation program.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 2 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

1 week 5 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND