Westpac Banking Corp, one of Australia’s leading banks, is facing legal action from the Australian Securities and Investments Commission (ASIC) over its alleged failure to respond to customers’ financial hardship notices. The alleged failure occurred over a seven-year period, from 2015 to 2022, and involves Westpac’s failure to provide a response within the required administrative time frame of 21 days.
ASIC has initiated civil penalty proceedings against Westpac, claiming that the bank’s online hardship notice process had shortcomings, leading to 229 customers not receiving a timely response. This failure in customer service has prompted ASIC to seek declarations, pecuniary penalties, and adverse publicity orders against the bank.
Acknowledging the issue, Westpac has described it as a “technology failure” and has taken steps to rectify the situation. The bank has reached out to the affected customers, offering refunds of fees and interest, debt waivers, and payments for non-financial loss, amounting to around A$900,000 ($581,310.00). However, the ASIC alleges that Westpac could have done more to investigate and address the problems with its online hardship notification process.
The significance of this issue lies in the vulnerable circumstances disclosed by many customers who submitted hardship notices to Westpac. These circumstances included an inability to work and serious medical conditions. Unfortunately, some customers had to endure debt collection activities while waiting for a response from the bank.
During the period of the alleged breach, Westpac received approximately 630,000 applications for hardship assistance. The incident was voluntarily reported to ASIC by the bank after its discovery, showing a commitment to transparency and accountability.
This case serves as a reminder of the importance of banks’ responsibility to promptly respond to customers’ financial hardship requests. ASIC’s legal action against Westpac seeks to hold the bank accountable for its alleged failure to meet this obligation, highlighting the need for a fair and timely resolution for those facing financial difficulties.
As the court proceedings progress, it will be interesting to see how ASIC’s claims are assessed and whether further actions will be taken to ensure that Westpac and other financial institutions prioritize the well-being of their customers in times of financial distress.
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