Westpac Banking Corporation is headed to court after failing to properly respond to its customer’s hardship notices.
The banking giant was put on notice earlier this week by the Australian Securities and Investment Commission (ASIC) after it began civil penalty proceedings against the brand in the Federal Court.
ASIC alleges that between 2015 and 2022, Westpac failed to respond to 229 of its customers’ hardship claims within 21 days.
This was the timeframe required by law.
All of these customers told Westpac they were experiencing financial hardship.
Many also expressed vulnerabilities in relation to their difficult circumstances.
Their circumstances included an inability to work, the impacts of serious medical conditions or their carer responsibilities.
In some cases, customers endured debt collection activities by Westpac while waiting for the bank to respond to their hardship notices.
ASIC deputy chair Sarah Court said the bank’s inaction added to its customers’ negative situations.
“Submitting a hardship notice, which results in a change to the credit contract, can be a lifeline for people experiencing challenging financial circumstances,” she explained.
“ASIC has taken this action to highlight the importance of lenders responding to hardship notices within the required timeframe to reduce harm to their customers.
“Westpac’s failures to respond to these notices compounded their customers’ difficult financial circumstances.”
ASIC alleges that between 4 September 2017 and 20 March 2022, Westpac breached the National Credit Code (Code).
Under the Code, a lender has 21 days to notify the customer if it does not agree to change the contract or if it requires further information to make its decision.
ASIC also alleges that Westpac breached the National Credit Act by failing to act efficiently, honestly and fairly when it came to responding to its customers’ hardship notices.
ASIC claims Westpac did not do enough to investigate and rectify the systems issues plaguing its online hardship notification process.
ASIC is seeking declarations, pecuniary penalties and adverse publicity orders against Westpac from the court.
The date for the first case management hearing is yet to be scheduled.
For more news stories like this:
- NSW teachers now highest paid in Australia
- Two more Trains wins 10-year fight
- Have your say on M1 Motorway extension
Get all the latest Newcastle news, sport, real estate, entertainment, lifestyle and more delivered straight to your inbox with the Newcastle Weekly Daily Newsletter. Sign up here.
