The bank was made aware of the issue following a customer complaint, and alerted ASIC that around 820,000 may have been incorrectly charged for transactions in Australian dollars that were processed by overseas merchants, the regulator said.
“Because Westpac's terms and conditions did not clearly state that foreign transaction fees would be charged for such Australian dollar transactions, Westpac commenced a process to identify impacted customers and provide refunds with interest,” the regulator said.
The bank has since updated its disclosure to clarify that these transactions will incur the foreign transaction fee, and ASIC has issued a warning to consumers regarding unexpected foreign transaction fees.
ASIC deputy chairman Peter Kell said it “may not always be clear” when a merchant is based outside of Australia, urging consumers to check the location of the merchant before purchasing.
Mr Kell went on to say that credit card issuers need to be sure the disclosure of potential fees is clear “so customers understand the fees that they are charged when using their cards”.
“It is essential for consumers to know when fees will be charged, so that they can make an informed decision when using financial products and services,” he said.
Westpac’s reporting of the issue and its cooperation in resolving it were acknowledged by ASIC.
Read more:
Funds under management ‘stagnates’ in 2015-16
Atrium Investment Management adds to team
Contagion risk still remains, says RBA
Top economist to headline new event
ECP wins wholesale super mandate
