The bank yesterday apologised for leaving customers out of pocket after transactions made on the busiest shopping days before Christmas were not processed correctly and only put through a fortnight later.
A technology glitch is being blamed for MasterCard credit and debit payments made on December 22 and 23 not going through properly.
Westpac has contacted customers in an email to apologise and advise people to go to a branch or ring its contact centre 0800 400 600 if they have been "financially challenged".
A solo mother of five said she was caught out while trying to buy groceries for her family.
The woman had left aside $300 for groceries for her children, aged 19 months to 17 years, but said her card declined at the supermarket checkout.
She described the incident as “both embarrassing and devastating”, particularly when she realised she wasn’t “just a little short”, but more than $200 in overdraft.
“I am disgusted that Westpac hadn’t released an email or anything to give its customers a heads up at any stage in the two weeks that it’s taken to figure this issue out and fix it.
“I’m not sure what I’m going to do now. I’ve never experienced this before. I feel powerless to provide for my family and I don’t know how I’m going to bounce back financially from this situation.
“I can imagine I’m not the only parent experiencing this and that is actually quite heartbreaking.”
An email provided to The New Zealand Herald, reportedly sent to Westpac staff, authorises employees to refund some customers up to $800.
“A small group of customers may be in financial difficulties as a result of this issue,” the email says.
“In these cases you are able to refund the amount of the relevant transaction/s (up to $800) to them to alleviate their situation, following your normal business process.
“For amounts in excess of this amount, please escalate to your People Leader.”
A Westpac spokesman did not confirm the $800 figure to the Herald, but said some reimbursements may be made, and all overdraft fees and interest incurred are being automatically waived.
“We’re aware some customers have been financially challenged by this payments issue. We’re really sorry people have been put in this position.
"Our team has been given discretion to work with customers to understand the financial impact, with a view to making reimbursements to those in need on a case-by-case basis."
Another customer told the Herald he was also in overdraft by $200.
“They had two weeks to give us a heads up or warning, so the sudden shock of waking up with my bank [balance] being in overdraft was quite the shock and all they do is waive the fees? How about waive the overdrafts of every single Westpac customer for your mistake,” he said.
“The bank should take it on the chin and issue an apology to their customers.”
The man said he didn’t know how he was “going to afford to live next week”.
“I’m always careful with my money and always check my account after transactions. Everything was normal until Westpac dropped this bomb on NZ customers.”
But not everybody agreed, with one affected customer saying going $800 into overdraft showed a lack of financial awareness.
“I was impacted, but not badly as I only spent minimal money over this period,” she said.
The incident highlighted how many people were living week to week and also did not read their bank statements regularly, could not manage their finances, or were unaware of their own financial situations, the woman said.
“I would certainly have questioned why I had extra money in my account if I had spent this amount pre-Christmas.”
Another Herald reader said people had a responsibility to track their own spending.
“I can’t believe people are so stupid that if they spend money and it doesn’t come out of their account they think they can spend it again.”
Banking Ombudsman Nicola Sladden said her office was aware of the blunder.
“We would expect a bank to promptly notify its customers of any systemic issues and promptly put the matter right."
Any customers concerned about the way the bank has handled the matter are welcome to contact the Banking Ombudsman Scheme which would help people work through their concerns, she said.
