A $3.64 million penalty levied against Westpac for failure to make full credit contract disclosure on a small number of consumer accounts from one decade ago is a mere pin prick given its $1.05 billion net profit for the 2024 year, but highlights the Bank’s incompetence when seeking to integrate legacy software systems.
Westpac self-reported to the Commerce Commission its failures to comply with Credit Contracts and Consumer Finance Act disclosures to customers as far back as 2015.
Most affected were some 1200 customers not fully advised of their credit contract rights on changes to home loan interest rates and another 5000 customers paying floating rates.
The High Court was told legacy IT systems were not properly adapted when new reporting systems were installed, leaving staff unaware that required credit contract disclosures were not automatically sent to some customers when interest rates changed; updated notice of consumer rights had to be triggered manually.
Westpac pro-actively compensated affected customers, reporting its errors to the Commerce Commission.
The High Court approved a negotiated settlement, with Westpac ordered to pay a $3.64 penalty.
Commerce Commission website subsequently announced somewhat ingeniously that ‘Westpac consented to Commission seeking the order.’
Breaches of the Act did not become public because of any pro-active investigation by the Commission; Westpac ‘fessed up to its mistakes.
Commerce Commission v. Westpac – High Court (27.11.25)
26.027