Class action alleges Westpac's super subsidiaries short-changed members

Class action alleges Westpac's super subsidiaries short-changed members

Westpac (ASX: WBC) subsidiaries BT Funds Management and Westpac Life Insurance Services have been hit with a class action from law firm Slater and Gordon (ASX: SGH).

The class action alleges that superannuation members were short-changed by the bank's super funds.

Slater and Gordon says members who invested in the BT Super for Life cash-only option were snubbed when they invested through Westpac Life and allowing it to earn substantial fees for providing no valuable service.

It is alleged that rather than investing member funds directly, BT chose to use Westpac Life as an intermediary, who then invested the money in an externally managed cash fund.

The firm claims that Westpac Life was given complete discretion about the interest rates it would pass onto members, and at times kept almost half of the returns on members' money for itself.

Slater and Gordon special counsel Nathan Rapoport says members have potentially lost out on thousands of dollars over a number of years.

"Superannuation members trusted BT with their retirement savings, but instead of seeking the best returns available for members, it appears BT chose to line the pockets of another entity in the Westpac group at the expense of its members," says Rapoport.

"In recent years Westpac Life actually achieved reasonable returns on members' money, but the arrangement meant that it kept much of that benefit for itself. One year, Westpac Life earned returns of around 2.5 per cent, but it delivered an interest rate of only 1.3 per cent to members.

"We believe Westpac Life provided no service that could justify it retaining such a large part of the returns generated from members' money, and we want the difference paid back to members."

Westpac says in a short statement to the ASX that it is defending the claims.

The class action is funded by Therium Capital Management and is part of Slater and Gordon's 'Get Your Super Back' campaign.

Shares in Westpac are up 0.39 per cent to $28.60 per share at 10.42am AEST.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

New report reveals 68 per cent of businesses are vulnerable to a cybersecurity attack

Partner Content
36 per cent of employees fear their organisation is at risk of financial losse...
SAI Global
Advertisement

Related Stories

AF Legal expands into the NT after taking control of local family law firm

AF Legal expands into the NT after taking control of local family law firm

For nearly a million dollars, listed law firm AF Legal (ASX: AFL) w...

Smartgroup shares plunge as suitor lowers takeover offer

Smartgroup shares plunge as suitor lowers takeover offer

Shares in Smartgroup (ASX: SIQ) have fallen back to where they were...

APA gets look in at AusNet for $9.96 billion takeover offer

APA gets look in at AusNet for $9.96 billion takeover offer

AusNet Services (ASX: AST) has today granted due diligence access t...

Pacific Fair sale puts the spotlight on buyers for Dexus’ minority stake

Pacific Fair sale puts the spotlight on buyers for Dexus’ minority stake

The Gold Coast’s Pacific Fair shopping centre, fresh from pla...