ASIC takes Westpac to Court for failing to respond to hardship notices
The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court against Westpac Banking Corporation for failing to respond to customers’ hardship notices within the time required by law.
ASIC alleges that between 2015 and 2022, a deficiency with Westpac’s online hardship notice process resulted in 229 Westpac customers not receiving a response to their hardship notice within the required timeframe of 21 days.
All of these customers told Westpac they were experiencing financial hardship. Many of these customers also told Westpac about their difficult circumstances and vulnerabilities, including their 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.
The regulator 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.
The Commission 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.