Finance Regulator Taking Westpac to Court over Hardship Cases

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.

Published:Thursday, 7th Sep 2023
Source: Paige Estritori

Share this news item:

Finance News

Clear

Uncovering the Impact of Unsolicited Solar Sales on Consumers 04 Jul 2025: Paige Estritori In a concerning revelation, Australian retiree Christine Hirchfield shares her ordeal with an unsolicited solar installation that turned into a financial nightmare. Despite her initial enthusiasm for cheaper energy bills and a greener home, the project remains incomplete more than a year later. Consumer groups are now advocating for a nationwide prohibition on deceptive sales practices that target vulnerable consumers like Ms Hirchfield. - read more

Australian Online Retail Sees Continued Growth in May Amidst Nationwide Spending Surge 03 Jul 2025: Paige Estritori Australian online retail sales experienced a modest rise in May, as consumers continued to invest in fashion, games, and toys. According to the latest figures from the National Australia Bank, there was a 0.7% increase in online sales for the month, compared to a 1.1% growth in April. Over the past year, Australians have spent approximately $63 billion on online retail purchases. - read more

Pay Boosts and Policy Changes: A Closer Look at Financial Updates for Australian Workers 03 Jul 2025: Paige Estritori The starting days of the new financial year bring significant changes for Australian workers, particularly those on minimum wage. As of Tuesday, the minimum wage will rise by 3.5 per cent, increasing hourly earnings to $24.95, or $948 weekly. This adjustment also affects award wages and comes as a response to rising living costs, outpacing current inflation rates. - read more