Regulator taking Westpac to court over hardship cases

Australia's oldest bank is being taken to court after the corporate watchdog alleged it failed to respond to financial hardship notices from hundreds of customers.

The civil action will be launched in the Federal Court on Tuesday and involves 229 Westpac customers impacted by the bank's online hardship notice process.

The Australian Securities and Investments Commission alleges that between 2015 and 2022 the customers did not receive a response to their hardship notices within the required 21 days.

"Submitting a hardship notice, which results in a change to the credit contract, can be a lifeline for people experiencing challenging financial circumstances," ASIC deputy chair Sarah Court said in a statement.

ASIC said it was taking legal action to highlight the importance of lenders responding to hardship notices within the required time frame to reduce harm to their customers.

"Westpac’s failures to respond to these notices compounded their customers’ difficult financial circumstances," Ms Court said.

Under the National Credit Code, a lender has 21 days to notify a customer signalling hardship if it does not agree to change the contract or if it requires further information to make its decision.

ASIC also claims Westpac didn't do enough to investigate and rectify systems issues affecting its online hardship notification process.

Westpac said the technology failure happened as the bank received about 630,000 applications for hardship assistance between 2015 and 2022.

“This error meant we didn’t provide some of our customers with the help they needed," Westpac group chief information officer Scott Collary said.

"For this, we are deeply sorry.”

Mr Collary also said Westpac had contacted the affected customers as part of a $900,000 remediation program that included refunds of fees and interest, debt waivers and payments for non-financial loss.

Westpac also noted it had self-reported the incident to the regulator.

The date for the first case management hearing is yet to be scheduled. 

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.

Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store