An Australian regulator has initiated legal action against Westpac, claiming the bank failed to respond to customers who submitted financial hardship notices due to issues with its online process.
In a lawsuit filed in federal court, the Australian Securities & Investments Commission (ASIC) alleges that from 2015 to 2022, Westpac violated the National Credit Code by not addressing 229 customer hardship notices within the required 21-day timeframe.
These customers indicated they were facing financial difficulties, with many sharing details about their challenging circumstances, including job loss, serious medical conditions, or caregiving responsibilities. In some instances, customers experienced debt collection efforts from Westpac while awaiting a response regarding their hardship notices.
The bank attributed its lack of response to a “deficiency” in its online submission system, which prevented the customer assistance team from seeing the notices. ASIC argues that Westpac failed to adequately investigate and resolve the system issues, seeking declarations, financial penalties, and adverse publicity orders as part of the legal action.
Westpac has acknowledged the “technology failure,” with CIO Scott Collary expressing regret: “This error meant we didn’t provide some of our customers with the help they needed. For this, we are deeply sorry. While we have assisted some of these customers in subsequent contact, it is not good enough that we missed their initial attempt to get in touch.”