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Westpac sued for allegedly ignoring vulnerable customers’ hardship notices
Westpac will face the Federal Court after ASIC alleged it failed to respond to customers’ hardship notices on time.
Naomi Neilson
Almost 300 Westpac customers said they did not receive a response to their hardship notice within the 21-day deadline required by law, the Australian Securities and Investments Commission (ASIC) alleged.
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Some customers claimed they were grappling with debt collection activities by the banking giant while their notices went ignored.
ASIC deputy chair Sarah Court said the action has been taken to “highlight the importance” of lenders responding to hardship notices within the required time frame “to reduce harm to their customers”.
“Submitting a hardship notice, which results in a change to the credit contract, can be a lifeline for people experiencing challenging financial circumstances,” Ms Court said in a statement.
“Westpac’s failure to respond to these notices compounded their customers’ difficult financial circumstances.”
It will be alleged that between 2015 and 2022, a deficiency with Westpac’s process impacted 229 customers and that the banking giant failed to investigate and rectify the system’s issues.
Between September 2017 and March 2022, ASIC also alleges Westpac breached the National Credit Code, which requires a lender to respond within 21 days if it does not agree to change the contract or if it requires further information to make its decision.
ASIC is seeking declarations, pecuniary penalties and adverse publicity orders against Westpac.
