ASIC sues Westpac for failing to respond to 229 hardship requests

afr.com:

The corporate regulator will launch legal action against Westpac on Tuesday alleging it failed to respond to requests from hundreds of its customers struggling with loan repayments over a seven-year period, who wanted to enter hardship arrangements with the bank.

The Australian Securities and Investments Commission will allege that, between 2015 and 2022, 229 customers told the bank they were experiencing financial hardship, including due to an inability to work, the impact of medical conditions or carer responsibilities. But a deficiency with its online hardship notice process resulted in them not receiving a response to their requests within the required time of 21 days.

The corporate regulator will pursue Westpac in the Federal Court. It previously took action over the bank’s alleged breaches of responsible lending laws, and was unsuccessful, in 2019. The Age

ASIC will allege this breached the National Credit Code, which stipulates lenders have three weeks to notify customers if they do not agree to change the lending contract or need additional information to decide. It will also argue Westpac failed to act “efficiently, honestly and fairly” by not responding to the reasonable requests from customers.

Westpac apologised for the situation. The bank said it had identified the incident, self-reported it to ASIC and had co-operated with its investigation.

“This error meant we didn’t provide some of our customers with the help they needed. For this, we are deeply sorry,” Westpac chief information officer Scott Collary said. “While we have assisted some of these customers in subsequent contact, it is not good enough that we missed their initial attempt to get in touch.”

Westpac said it received a total of 630,000 hardship