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Westpac (ASX: WBC) and law firm Slater and Gordon (ASX: SGH) have today reached a $29.95 million settlement in a class action against two of the bank’s subsidiaries which were alleged to have short-changed members.
According to the law firm, tens of thousands of Australians may now receive compensation following the settlement of the class action relating to Westpac subsidiaries BT Funds Management Limited and Westpac Life Insurance Services Limited.
As part of the class action, Slater and Gordon alleged members who invested in the BT Super for Life cash-only option received lower returns because BT invested their funds through Westpac Life, allowing Westpac Life to earn fees without providing a valuable service.
The firm claimed 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.
The class action applied to customers who had invested their super in the BT Super cash option between 2007 and 2019, and was Slater and Gordon’s third such action in its ‘Get Your Super Back’ campaign.
The settlement was reached on a ‘no admissions’ basis and BT and Westpac Life both deny any liability.
“The case alleged BT prioritised Westpac Life’s profits over its duty to see the best returns available for its members’ retirement savings, leading to lower returns for members,” Slater and Gordon special counsel Nathan Rapoport said.
“Superannuation members trust their funds with their retirement savings and place their faith in them to protect their future. We are pleased this settlement means that group members will be getting millions of dollars of compensation.
“This result would not be possible without a class actions regime that allows one person to represent the interests of thousands of others like them who might not even be aware of their legal rights.”
Shares in WBC are down 0.98 per cent to $23.27 per share at 11.15am AEDT.
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