Westpac Banking Corp. is facing a class action lawsuit for allegedly selling life insurance products more expensively in-house than the same products sold by independent wealth advisers, The Australian reported Oct. 13.
Shine Lawyers filed a lawsuit against the bank alleging that Westpac and its subsidiaries Bank of Melbourne, Bank of SA and St. George sold policies in-house loaded with "excess premiums." It claims the premiums payable on the Westpac insurance policies were about 4.5% higher than those payable on identical policies obtained through external financial advisers. A group of seven Westpac clients is behind the lawsuit, the report said.
The bank reportedly sold life insurance policies through independent wealth planners coded "CF 0.95," which the class action says means the policies were sold at 95% of face value, that is, a 5% discount. Policies sold through the bank's own planners were coded "CF 1.045," which Shine says refers to the 4.5% more in premiums being charged.
Shine is seeking damages comprising the excess premiums charged on the policies, along with "all benefits, profits and gains made or derived" by Westpac from its use of the excess premiums.
A Westpac spokesman said the bank was looking into the matter.