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Slaters files class action against Westpac subsidiaries
National firm Slater and Gordon has launched a class action against two Westpac subsidiary companies on behalf of “thousands who were short-changed” by the bank’s super funds.
Jerome Doraisamy
The class action has been filed against Westpac’s subsidiaries BT Funds Management Limited and Westpac Life Insurance Services Limited and alleges BT has been short-changing its members who invested in the BT Super for Life cash-only option by investing through Westpac Life and allowing it to earn substantial fees for providing no valuable service.
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It has been launched in the Victorian Registry of the Federal Court on behalf of Tracey Ghee.
The action, Slaters said in a statement, was “on behalf of thousands of superannuation members who were short-changed by the bank’s super funds”.
“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,” Slaters said.
Westpac Life was “given complete discretion about the interest rates that it would pass on to members, and at times kept almost half of the returns on members’ money for itself”, according to Slaters special counsel Nathan Rapoport, which resulted in members losing out on potentially thousands of dollars over many years, he posited.
BT breached its duty to act in the best interests of members, he submitted, and that Westpac Life was involved in this breach.
“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,” Mr Rapoport said.
“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.”
The case is funded by Therium Capital Management, a leading litigation funder based in the UK and Australia.
In a statement, Westpac confirmed that it had received a class action, on behalf of Ms Ghee, against the subsidiary companies in relation to aspects of BTFM’s BT Super for Life cash investment option.
Westpac said the damages sought were “unspecified” and that both BTFM and WLIS will be defending the claims.
MORE TO COME.
