In a fresh blow to Westpac, the Federal Court this morning delivered the corporate regulator a win in its appeal against a previous ruling on Westpac’s telephone campaigns. Via Financial Standard.
The full court this morning said ASIC’s appeal will be allowed with costs, while Westpac-related companies’ cross-appeal will be dismissed.
The matter relates to whether or not Westpac’s telephone sales campaigns amounted to advice and if that advice was personal or general in nature.
In 2014 and 2015, Westpac ran telephone and snail-mail campaigns to encourage customers to roll over external superannuation accounts into their existing accounts with Westpac Securities Administration Limited and BT Funds Management.
ASIC was primarily concerned with the telephone calls.
The corporate regulator claimed that the two Westpac companies had breached their FoFA-stipulated best interest duty by advising rollovers to Westpac-related super funds without a proper comparison of options, as required by law.
And so, it initially launched civil penalty proceedings against the two Westpac subsidiaries in December, 2016.
The Federal Court handed down its judgment in January this year, with a mixed outcome. It decided that ASIC had failed to demonstrate that the two Westpac companies had provided personal financial product advice to 15 customers in regards to the consolidation of superannuation accounts.
However, the judge added the Westpac subsidiaries contravened the Corporations Act in 14 of 15 customer phone calls by implying the rollover of super funds into a BT account was recommended. This came about through a “quality monitoring framework” where BT staff were coached in sales technique.
ASIC appealed the January judgment. Westpac also made a counter appeal.
