Australia's corporate regulator said on Thursday it had filed a civil lawsuit against Westpac Banking Corp, alleging the country's second-largest lender sold consumer credit insurance to customers who had not agreed to buy it.

The action follows a wider review by the Australian Securities and Investments Commission (ASIC) into the sale of consumer credit insurance between 2018 and 2019 by 11 banks.

The review found these policies were being sold to customers using high-pressure selling methods and to those not eligible.

Westpac said it was considering ASIC's claims over the sale of consumer credit insurance products to 384 customers, adding that it had not sold those products since 2019.

ASIC added it was seeking monetary penalties from Westpac for the sale of the insurance products with the bank's credit cards and other lines of credit between April 7, 2015 and July 28, 2015.

The regulator did not specify the penalty amount.

Australia and New Zealand Banking Group Ltd and National Australia Bank Ltd have also been slapped with lawsuits and scrutiny over similar practices.