Finance Regulator Taking Westpac to Court over Hardship Cases
ASIC Sues Westpac over Alleged Mishandling of Customer Hardship Requests
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Australia’s oldest bank, Westpac, is facing legal action as the Australian Securities and Investments Commission (ASIC) alleges that it failed to respond to financial hardship notices from hundreds of customers.
The civil action, which involves 229 impacted customers, will be launched in the Federal Court this week.
According to ASIC, between 2015 and 2022, these customers did not receive a response to their hardship notices within the required 21-day timeframe. The regulator believes that submitting a hardship notice, which leads to a change in the credit contract, can serve as a crucial lifeline for individuals facing challenging financial circumstances.
"Westpac’s failures to respond to these notices compounded their customers’ difficult financial circumstances," stated ASIC deputy chair Sarah Court, emphasizing the adverse impact caused by the bank's negligent handling of the situation.
Importance of Timely Response to Hardship Notices
ASIC's decision to take legal action against Westpac highlights the significance of lenders promptly addressing hardship notices to minimize harm to their customers. Under the National Credit Code, lenders are required to notify customers signaling hardship within 21 days if they do not agree to modify the current contract or if they require additional information to make a decision.
In addition to the delayed responses, ASIC further alleges that Westpac did not adequately investigate and address system issues affecting its online hardship notification process.
In response to the allegations, Westpac acknowledged a technology failure, citing a high volume of approximately 630,000 hardship assistance applications between 2015 and 2022. The bank expressed regret for failing to provide the necessary support to some of its customers during this time.
Westpac's group chief information officer, Scott Collary, stated, "For this, we are deeply sorry." He confirmed that the bank had reached out to the affected customers as part of a comprehensive remediation program costing $900,000, which included refunds of fees and interest, debt waivers, and payments for non-financial loss. Westpac also disclosed the incident to the regulator.
The date for the first case management hearing is yet to be scheduled.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Reserve Bank of Australia’s latest retail payments update offers another useful snapshot of how households are managing everyday spending, card use and short-term credit. While payment data is not the same as loan approval data, it can still tell borrowers something important: the way money moves through a household each month can affect how comfortable a lender feels about future repayments. - read more
The Reserve Bank of Australia’s latest lending rate statistics are a useful reminder that personal borrowing costs can vary widely, even when the broader cash rate outlook appears steady. For households considering a car loan, debt consolidation loan or unsecured personal loan, the key issue is not simply whether rates are rising or falling. It is whether the loan being offered is affordable, suitable and competitive for the borrower’s circumstances. - read more
The Reserve Bank of Australia’s latest financial aggregates add another layer to an ongoing story for personal loan borrowers: consumer credit remains an important pressure point for household budgets, even as interest rate settings stay under close watch. - read more
Responsible lending checks help lenders assess whether a personal loan is suitable for an applicant's needs and affordable based on their financial situation. Here's why lenders ask detailed questions about income, expenses and loan purpose in Australia. - read more
Embarking on the journey to secure a personal loan can often seem like navigating through a complex financial landscape. Particularly for Australians, where the market is bustling with a multitude of lenders each with their respective criteria and rates, increasing the chances of loan approval is a pursuit that requires insight and preparation. - read more
As a first-time borrower, understanding the importance of budgeting is crucial. Effective budgeting can make all the difference in achieving financial stability and meeting your financial goals. It helps you manage your income, control your spending, and save for future needs. - read more
Need Help Finding a Loan?
Find out now if you qualify and compare
rates, offers and options from multiple lenders - without a credit check!
All finance quotes are provided free (via our secure server) and without obligation. We respect
your
privacy.
Knowledgebase
Gross Domestic Product (GDP): The total value of all goods and services produced within a country’s borders in a specific time period.
No comments yet. Be the first to share your thoughts.