National Australia Bank (NAB) is facing legal action from the Australian Securities and Investments Commission (ASIC) for ignoring the pleas of vulnerable customers facing financial hardship.
ASIC claims that between 2018 and 2023, NAB did not meet the 21-day legal deadline to respond to 345 hardship applications.
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The watchdog has filed a lawsuit against NAB and its subsidiary AFSH Nominees (AFSH), accusing them of neglecting customers in financial distress.
The regulatory body is seeking various penalties, including declarations, pecuniary penalties, and orders for adverse publicity in the Federal Court.
ASIC Chair Joe Longo said “We allege NAB unlawfully failed to respond to their customers’ appeal for help when they needed them most.
“These customers included people who were domestic violence victims, battling serious medical conditions, dealing with business closures or job loss. NAB’s failures likely compounded the already challenging situation for these people.
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By GlobalData“Amidst rising cost of living pressures, we have seen an increased number of customers reach out to their lenders for relief, and we have seen first-hand the impact on lives and livelihoods when lenders fail to appropriately support customers experiencing financial hardship.
“Compliance with financial hardship obligations is an enforcement priority for ASIC in 2024. Earlier this year, we put the lending industry on notice on the release of our hardship report.”
This development follows similar legal action taken by ASIC against Westpac in September 2023.
ASIC alleged that Westpac failed to respond to customer hardship notices within the mandated 21-day period. The issue, pertaining to the bank’s online hardship notice process, reportedly affected 229 customers between 2015 and 2022.
Customers who reached out to Westpac were in dire financial straits, with many facing severe medical conditions, unemployment, or carer responsibilities.
ASIC’s allegations suggest that while these customers awaited a response, they were subjected to Westpac’s debt collection activities, adding to their financial and emotional burden.
