Westpac Clients To Get $8m In Refunds
Sydney Morning Herald
Saturday November 4, 2006
UP TO 40,000 Westpac customers are set to share an $8 million refund package after the bank discovered they had missed out on certain discounts that should have been offered to them when they signed up to a specially tailored mortgage offer.
The refunds will average around $200 per customer for customers who took out a Premier Advantage Package (PAP), under which they should have received either waived fees on two specific bank accounts and two types of credit cards or a discount on new or refinanced personal loans.News of the gaffe came just a day after Westpac chief executive David Morgan had to explain away a credit card accrual error during the bank's annual profit presentation in Sydney. That error cost the bank $34 million, and Dr Morgan described it as a "very annoying mistake". Admitting that he couldn't guarantee Westpac would never have any such problems again, he said with 27,000 employees, "occasionally you will get glitches like these".Westpac admitted on Friday that the problem with the PAP had come to light earlier this year but that no reference had been made to it in the results press conference because the bank did not want to distract from the importance of alerting customers.Provision for the $8 million write-off will be made in this year's accounts.Letters explaining the problem and likely entitlements were sent out by Westpac on Friday night. In the case of those where the bank has managed to work out exact figures, many thousands of people will also receive a cheque on Monday morning for the amount the bank estimates they missed out on.Altogether, 300,000 customers have signed up to the PAP since its launch in 1998, of which around one in seven lost out in the fee benefits offer. Those entitled to a possible refund are Westpac One and Classic Plus account-holders and credit card holders with either a 55-day Gold card or an annual Altitude Gold card.Westpac blamed the problem partly on outdated technology and the fact that customers had not actively indicated what other accounts they had. The bank's general manager for product and marketing, Tim Harrington, said new procedures had been introduced to prevent another occurrence while customers would also be kept better informed about their benefits.
© 2006 Sydney Morning Herald
