Westpac exposed its customers to a ‘high risk of harm’ when it suddenly closed a branch in the outback, leaving hundreds of people dependent on a local charity to access cash, a banking watchdog has found.
The bank closed its Tennant Creek branch in the Northern Territory in September 2022, initially telling the community the closure was temporary.
After three weeks, Westpac sent letters, emails and text messages advising that the closure would be permanent and referring customers to alternative services.
An industry watchdog released its investigation into the closure on Tuesday, punishing Westpac for “serious and systemic” breaches of its obligations under the Banking Code of Practice.
The investigation found that Westpac failed to comply with the Australian Banking Association’s branch closure protocol by failing to adequately inform customers of the closure.
The bank closed this branch in Tennant Creek, in the Northern Territory, in September 2022
Westpac exposed customers to a ‘high risk of harm’ by closing its branch, a watchdog has found
It also failed to properly support Tennant Creek residents in accessing other services, the Banking Code Compliance Committee report found.
The commission sanctioned Westpac by publicly releasing the details of its breaches.
“In this case, Westpac has failed to deliver on their promise to customers,” chairman Ian Govey said in a statement.
“Their actions have had a significant and damaging impact on many people within the Tennant Creek community.”
The finding comes a month after a long-running Senate inquiry recommended stricter regulation of bank closures, following almost 800 closures across Australia in the six years to June 2023.
A Westpac spokesperson said the closure of Tennant Creek took place outside of normal processes, following damage to the branch and ATM, which posed a security risk.
“We recognize that more could have been done to fully support our customers during the closure,” the spokesperson said.
“As a result, we have reviewed and strengthened our facility closure protocols.”
The watchdog said there were 3,398 branch customers when it closed.
“The breaches posed a significant risk of harm to customers,” the report said.
Charity CatholicCare NT told the inquiry it was swamped by hundreds of elderly Indigenous people after closure as they were left without cash
“The community members who were most affected, or at risk of being most affected… were those who were potentially vulnerable and ill-equipped to handle the transition without notice or assistance.”
The closure was also a major focus of the Senate’s previous investigation.
Charity CatholicCare NT told the inquiry it was swamped by hundreds of older Indigenous people after closure, as they were left without cash or had to quickly adapt to digital services.
The Senate committee has recommended that a banking regulator have veto power over closures.
“The committee is struck by the depth of community concern, feelings of disappointment and anger, and the consistency of messaging from regional Australia,” the final report said.
‘People feel abandoned and disrespected by the banks.’