Westpac could pay millions of dollars in penalties if the Federal Court rules the bank did not respond to pleas from customers within the required time frame.
Westpac could face millions of dollars in penalties for failing to respond to customers’ hardship notices quickly enough if the Federal Court rules in favour of the corporate regulator.
“Submitting a hardship notice, which results in a change to the credit contract, can be a lifeline for people experiencing challenging financial circumstances,” she said. “Westpac’s failures to respond to these notices compounded their customers’ difficult financial circumstances.” “In some cases, customers endured debt collection activities by Westpac while waiting for the bank to respond to their hardship notices,” the regulator said.Under section 72 of the National Credit Code, a lender has 21 days to notify the customers if it does not agree to change the contract or if it requires further information to make its decision.
Westpac group chief information officer Scott Collary has acknowledged the civil penalty proceedings and said the technology failure meant the bank did not provide some of its customers with the help they needed. “We have strengthened our processes and are upgrading our online hardship applications,” Collary said.ASIC has also alleged that Westpac did not do enough to investigate and rectify the systems issues plaguing its online hardship notification process and is seeking declarations, pecuniary penalties and adverse publicity orders against the bank from the court.
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