BT and Asgard hit with $3m penalty by Federal Court

ASIC confirmed on Monday that 404 customers were affected by the wealth giants’ conduct between September 2014 and August 2017.

The court found that during that time both companies:

• Made false or misleading representations to customers in customer account statements that no deductions of ongoing adviser fees were being made from customers’ accounts after those customers requested to remove their financial advisers from their accounts.
• Engaged in misleading or deceptive conduct by providing customers with account statements that did not show that BT and Asgard were continuing to deduct an ongoing adviser fee from customers’ accounts after those customers requested to remove their financial advisers from their accounts.

The court also found Asgard breached “its obligation to do all things necessary to ensure the financial services covered by its financial services licence were provided efficiently, honestly and fairly”.

“Misleading statements were made to customers, who were also charged for services they did not receive,” ASIC deputy chair, Sarah Court, said.

“The licensed financial services industry has an obligation to ensure that their systems and processes are reliable, accurate and their customers must be able to have trust in them.”

Justice Wheelahan said in his decision: “Financial services providers in the position of the defendants should not be able to take the benefits which arise from automated and offshore processes and systems, which it may be inferred contribute to substantial profits, without also undertaking the burden of ensuring that those systems work, and that they promptly identify occasions where they do not.

“An appropriate penalty should have the effect of deterring the defendants, and financial services providers generally, from maintaining defective systems, and conversely, providing an incentive to establish and maintain systems that are reliable.”

Westpac has indicated that it will pay the penalties and costs against BT and Asgard.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.