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Ann: GENERAL: FMA: Settlement reached over Westpac rural interest rate swaps

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    • Release Date: 17/02/15 09:01
    • Summary: GENERAL: FMA: Settlement reached over Westpac rural interest rate swaps
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    					FMA
    17/02/2015 09:01
    GENERAL
    NOT PRICE SENSITIVE
    REL: 0901 HRS Financial Markets Authority
    
    GENERAL: FMA: Settlement reached over Westpac rural interest rate swaps
    
    Media Release
    MR No. 2015 - 04
    17 February 2015
    
    FMA settlement reached over Westpac rural interest rate swaps
    
    The Financial Markets Authority (FMA) has reached a settlement with Westpac
    regarding the sale, promotion and marketing of interest rate swaps to some
    rural customers.
    
    The settlement follows the FMA's engagement with Westpac in relation to its
    processes for selling and marketing interest rate swaps to rural customers
    from 2005 to 2012.
    
    The FMA's settlement agreement has been reached alongside a separate
    settlement between the Commerce Commission (the Commission) and Westpac, also
    announced today.
    Under the Commission's settlement, Westpac will make available a total of
    $2.47 million to the 38 eligible customers who registered their complaints
    with the Commission. Westpac will also pay $250,000 towards the Commission's
    costs and another $250,000 to Rural Support Trusts.
    Westpac has said it does not accept the Commission's conclusions, but has
    admitted that some of its conduct breached section 9 of the Fair Trading Act
    in relation to some of its rural customers.
    
    The FMA did not carry out a separate investigation in this case.  However,
    arising from the Commission's conclusions, the FMA had concerns about
    potentially misleading conduct by Westpac, relating to the sale and marketing
    of interest rate swaps to some rural customers.
    
    The FMA acknowledges that neither its concerns nor the Commission's
    conclusions have been tested in Court.
    
    As part of the settlement agreement with the FMA, Westpac has agreed to
    appoint an independent third-party to review its sale, promotion and
    marketing of two sample products being interest rate swaps and its Notice
    Saver PIE.
    
    The report from a third-party will be provided to Westpac and then to the
    FMA. Following consultation with the FMA, Westpac will implement the
    recommendations in the review, where appropriate, across all relevant
    products and services.
    
    "One of the FMA's key objectives, set out in our Strategic Risk Outlook, is
    to ensure that sales processes and advice services reflect the best interests
    of customers. This settlement is based on our concerns that consumers should
    receive full and accurate information when purchasing financial products or
    services," said the FMA's General Counsel, Liam Mason.
    
    "The FMA is the regulator of conduct in this area, so the settlement also
    recognises our concerns about the imbalance of information that can exist
    between customers and financial service providers. The purpose of the
    independent review required by this settlement is to help ensure robust sales
    and advice processes are in place, including the disclosure of all relevant
    information, and that they meet the standards of the new regulatory
    framework."
    
    Under the Financial Markets Conduct Act 2013, from 1 April 2014 the FMA has
    responsibility for regulating misleading and deceptive conduct in relation to
    any dealing in financial products or services.
    
    The settlement agreement is available here -
    http://www.fma.govt.nz/keep-updated/newsroom/media-releases/2015/action-again
    st-non-filing-of-financial-statements-pays-off
    
    ENDS
    
    Contact:
    Shae Skellern
    09 300 0465
    021 847 192
    [email protected]
    End CA:00260700 For:FMA    Type:GENERAL    Time:2015-02-17 09:01:28
    				
 
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