Westpac has ripped off its own banking customers by selling them overpriced life insurance products identical to cheaper policies it sells to the public through independent financial advisers, a class action legal case alleges.
Shine Lawyers has lodged the action against the nation’s second-biggest bank, alleging it abused its position of power and breached its fiduciary duties by using its in-house financial planners to sell its customers policies it had loaded with “excess premiums”.
The case has the potential to embroil Westpac in a financial services controversy after ANZ and National Australia Bank in 2015 said they had compensated clients after wrongdoing relating to financial advice.
The Commonwealth Bank has announced the sale of its insurance business after the bank was rocked by scandals at its financial services arm. Chief executive Ian Narev announced plans to retire next year after Austrac launched anti-money laundering action against the bank.
The class action claims Westpac and its subsidiaries Bank of Melbourne, Bank of SA and St George charge their own banking customers 4.5 per cent more when the policies are taken out, and again each time they are renewed compared with policies available through independent advisers.
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