Westpac exposed its customers to a “high risk of harm” when it suddenly closed an indoor branch, leaving hundreds of people reliant 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 saying the closure would be permanent and directing customers to alternative services.
An industry watchdog published its investigation into the closure on Tuesday, sanctioning Westpac for “serious and systemic” breaches of its obligations under the Banking Code of Practice.
The investigation found Westpac failed to comply with the Australian Banking Association’s branch closure protocol by failing to provide customers with adequate information about the closure.
The bank closed this branch in Tennant Creek, Northern Territory, in September 2022.
Westpac exposed customers to ‘high risk of harm’ by closing branch, watchdog found
It also failed to provide adequate support for Tennant Creek residents to access other services, according to the Banking Code Compliance Committee report.
The committee sanctioned Westpac by making details of its violations public.
“In this case, Westpac has failed to deliver on its promise to customers,” chairman Ian Govey said in a statement.
“His actions have had a significant and detrimental impact on many people within the Tennant Creek community.”
The finding comes a month after a lengthy Senate inquiry recommended stricter regulation of bank closures, following nearly 800 closures across Australia in the six years to June 2023.
A Westpac spokesperson said the closure of Tennant Creek occurred outside of its normal processes after damage to the branch and ATM, which posed safety threats.
“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 branch closure protocols.”
The watchdog said there were 3,398 branch customers when it closed.
“The violations posed a high risk of harm to customers,” the report said.
Charity CatholicCare NT told the inquiry it was inundated by hundreds of older Indigenous people after lockdown as they ran out of cash.
“The community members who were most affected, or at risk of being affected, were those who were potentially experiencing vulnerability and were not equipped to handle the transition without warning or assistance.”
The shutdown was also a major topic of the Senate’s previous investigation.
Charity CatholicCare NT told the inquiry it was inundated by hundreds of older Indigenous people after lockdown as they ran out of cash or had to quickly adapt to digital services.
The Senate committee recommended that a banking regulator have veto power over closures.
“The committee has been impressed by the depth of community concern, feelings of disappointment and anger, and the consistency of messaging from regional Australia,” its final report said.
“People feel abandoned and disrespected by banks.”
