Westpac has been penalised by the banking watchdog for abruptly closing a remote branch that critics claim left some customers without a way to buy food.
The Banking Code Compliance Committee (BCCC) found Westpac committed “serious and systemic” breaches of the banking code by failing to adequately support customers when closing the Tennant Creek branch in the Northern Territory in 2022.
“Westpac did not provide adequate support for affected customers living in the remote community of Tennant Creek to access alternative banking services following the branch closure,” the watchdog said on Tuesday.
The BCCC chair, Ian Govey, said “Westpac’s failure to respond promptly to community concerns and provide adequate support was troubling and appears to have disproportionately impacted on vulnerable customers”.
Kelly Gulliver, CatholicCare NT’s financial wellbeing manager, said the branch closed without warning or consultation. The aftermath was a “complete mess”, she added.
“It was disastrous for those customers, many of whom are First Nations people and speak English as a second language.
“Some people were unable to buy food because they relied on face-to-face banking. Westpac’s response was everyone needs to move with the times and do online banking but it wasn’t suitable for everyone because of the barriers the community faces.”
Gulliver said for two months after the branch closed in late 2022, CatholicCare NT’s Tennant Creek office was helping up to 40 people a day switch to online banking or another bank that still had a branch in town.
She said the organisation had to send staff from Darwin to help with the influx of people needing support.
The watchdog sanctioned Westpac by naming the bank and publishing details of the breaches on its website. That was the most severe action the compliance committee could take.
Peter Gartlan, the chief executive of Financial Counsellors Australia, welcomed the watchdog taking the strongest possible action against Westpac.
But he said the BCCC should be able to issue financial penalties when banks breached their obligations.
Gartlan said banks should face the same penalties as insurers, for example, who can be fined and required to self-publish outcomes from investigations into their conduct.
“The issue is with the banking sector who need to take up more responsibility for their code,” he said.
A Westpac spokesperson said “ongoing safety and security threats in Tennant Creek meant we needed to close the branch outside the standard process in order to protect our people”.
But, they said, Westpac had maintained an ATM in the town and coordinated visits from its remote banking team.
“Customers were notified of the closure and alternative banking options via SMS ahead of closure, as well as posters in the branch,” the spokesperson said.
“We recognise more could’ve been done to fully support our customers during the closure. As a result, we have reviewed and strengthened our branch closure protocols.”
Westpac in May extended a moratorium on regional branch closures until 2027 while it strengthened services.
