ASIC has initiated proceedings in the Federal Court against
The allegations against Westpac:
ASIC's claims against Westpac (filed in
ASIC asserts that Westpac, on at least 34 occasions, rejected customers' hardship notices on the grounds of insufficient information. These rejections occurred even when the information in customers' online hardship notices was compromised by the earlier system malfunction.
Westpac also faces other allegations, including:
-
the improper recording of adverse repayment history information on the credit files of affected customers on more than 22 occasions;
- recording default information on the credit files of affected customers on an unspecified number of occasions; and
- selling accounts belonging to affected customers to third-party debt purchasers on at least 21 occasions and initiating proceedings to repossess mortgaged properties from these customers on at least three separate occasions.
What are your statutory obligations as a Credit Licensee?
For credit licensees, the legal action against Westpac serves as a reminder of the obligations that must be met. Section 72(1) of the National Credit Code stipulates that when a debtor finds it impossible to meet their obligations under a credit contract, they may notify the credit provider or debt manager of their hardship. This notification, known as a hardship notice, imposes specific legal obligations on the credit provider or debt manager, including the duty to provide a timely and reasonable response.
Timeframe to respond to a hardship notice:
How to respond to a hardship notice:
Failure to meet these obligations can result in severe consequences, including the suspension and cancellation of your credit licence, along with potential fines or imprisonment for your company and its representatives.
Significantly, on
How can we help?
If your business requires assistance in meeting its obligations to promptly address vulnerability and financial hardship notices from customers,
Don't hesitate to contact us for more information or to initiate a discussion about how we can support your business. Ensuring compliance with these critical obligations is paramount for financial institutions.
Further Reading:
Q&As for lenders - dealing with financial assistance requests
23-242MR ASIC sues Westpac for failing to respond to hardship notices
ASIC Strengthens Oversight of Credit and Debt Management
ClearLoans penalised
ASIC v
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