Westpac hit with BT class action
Slater and Gordon has filed a class action against Westpac subsidiaries on behalf of superannuation members. The claim was filed against BT Funds Management and Westpac Life Insurance Services on Friday.The claim is that BT short-changed BT Super for Life members by investing the cash-only option through Westpac Life, allowing it to earn fees while providing no valuable service. According to the claim, Westpac Life was given complete discretion about the interest rates it would pass on to members, and at times kept almost half of the returns on members' money for itself.Slater & Gordon claims that in one year Westpac Life earned 2.5 per cent but credited only 1.3 per cent to members.BT is alleged to have breached its duty to act in the best interest of its members.Slater and Gordon special counsel Nathan Rapoport said in a statement: "We believe Westpac Life provided no service that could justify it retaining such a large part of the returns generated from members' money, and we want the difference paid back to members."The case is being funded by litigation funder Therium Capital Management Westpac said in a statement that BT and Westpac Life would be defending the claim.Slater and Gordon is running similar class actions against Colonial First State and AMP Super.The claim against Colonial is that its super fund breached the trust of members by investing their savings with the parent bank, Commonwealth Bank, despite that fact the bank did not offer the best interest rates.The claim against AMP is that it paid too much to related entities for administration services, resulting in excessive fees on members' super accounts. A further claim is that where members' funds were held in cash-only options members received interest rates that were lower that what a reasonable and diligent trustee could have obtained in the open market.