Westpac has become the second bank to be pinged by ASIC for misleading consumers over credit limit increases.
Commonwealth Bank previously accepted an enforceable undertaking from the watchdog regarding misleading communications with consumers regarding limit increases. Now Westpac has also run afoul of the regulator.
NCCP regulations commencing 1 July restrict lenders from sending out unsolicited credit limit increase invitations, unless a customer has previously consented to the communications. ASIC said that between February and March of this year, Westpac sent messages to customers via email, credit card statements and through its website requesting they provide consent for the credit limit increase invitations, and falsely suggesting that customers needed to act urgently or miss out on accessing additional credit. As a result, around 3,700 customers provided consent.
“Under the changes to the law, customers can provide or withdraw their consent at any time. Further, regardless of whether they have consented to being sent credit limit increase invitations, customers can request a credit limit increase from their financial institution at any time. Nothing in the new legislation changes this,” ASIC said in a statement.
In spite of being chastised by the regulator, ASIC commissioner Peter Kell praised Westpac for cooperating fully when concerns over the communications were brought forth.
“Westpac has acknowledged ASIC’s concerns and has undertaken to not rely on the consents obtained from customers who may have been misled, and contact each customer who consented to correct any misleading impression,” Kell said.
Kell said Westpac had also obtained customer consent through methods the regulator had not deemed misleading, and that these consents would be unaffected. Nevertheless, Kell vowed that the regulator would continue to keep a close eye on NCCP compliance throughout the industry.
“ASIC will continue to carefully monitor industry implementation of important consumer protection reforms in the National Consumer Credit Protection Act,” he said.
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