SYDNEY, Oct. 13 (Xinhua) -- Australia's second largest bank has been hit with a 100 million Australian dollar (78 million U.S. dollars) class action lawsuit in Federal Court late Thursday, with claims the Westpac Banking Corporation overcharged customers for "in house" life insurance policies.
Shine Lawyers have alleged the financial institution referred customers to its own financial planners, in order to mislead them into purchasing insurance that was more expensive than could be bought elsewhere.
Special Counsel for the class action Jan Saddler, told Xinhua in statement on Friday there is believed to be tens of thousands of customers impacted by the charges.
"We believe that Westpac took advantage of its relationships with customers to boost its bottom line, by signing clients up to their own in-house insurance which they knew was more expensive," she said.
"The bank and its financial planners have an obligation to act in the best interests of their clients."
"In this case Westpac has abused its powers and the trust of its customers."
Based on over 1 million quotes analysed by comparison platform, Lifecompare, financial planning and insurance industry specialist Brian Boggs said Australia's largest banks are known for offering coverage that is on average, more than 20 percent more expensive than the cheapest product in each category.
But on this occasion, Boggs believes, "the alleged Westpac overcharge may even go beyond this."
"This action is about accountability and ensuring customers who have been duped have the opportunity to stand up and demand more from an institution they entrusted to act in their interests."