A woman exits the ground floor of an office building bearing the Westpac logo amid the easing of coronavirus disease (COVID-19) restrictions in Sydney’s central business district, Australia, June 3, 2020. REUTERS/Lauren Elliott Obtain licensing rights
Sep. 5 (Reuters) – Australia’s corporate regulator said on Tuesday it will take legal action against Westpac Banking Corp (WBC.AX) over its alleged failure to respond to clients’ notices of financial difficulty between 2015 and 2022 within the required administrative timeframe.
under Section 72 of the Australian National Credit ActAn individual with payments in arrears can request a change in the terms of their credit contract based on financial difficulties, and creditors are expected to provide a written response within 21 days of being notified.
The Australian Securities and Investments Commission (ASIC) said in a statement that it has initiated civil penalty proceedings in federal court against Westpac, noting that deficiencies in the online lender’s notice of difficulties process resulted in 229 Westpac customers not receiving a response in a timely manner.
The company said the legal action was related to a “technological failure” and Westpac had contacted affected customers and completed a remediation program including fee and interest recovery, debt forgiveness and non-financial loss payments of approximately A$900,000 ($581,310.00). In an emailed response to Reuters.
The regulator said Westpac could have done more to investigate and correct system problems affecting the online hardship notification process.
“This error means that we are not providing some of our customers with the help they need. We deeply regret this,” said Westpac Group chief information officer Scott Colari.
ASIC said many customers had disclosed their vulnerable circumstances to Westpac, including their inability to work and the effects of serious medical conditions, with some customers having to grapple with debt collection activities while waiting for the bank to respond to their hardship notices.
“ASIC is seeking advertising, financial penalties and negative publicity orders against Westpac from the court.”
During the period of the alleged breach, Westpac received approximately 630,000 applications for hardship assistance, the company told Reuters, adding that once the incident was brought to light, it opted to self-report to ASIC.
($1 = 1.5482 Australian dollars)
(Reporting by Roshni Nair in Bengaluru; Reporting by Muhammad for The Arabic Bulletin) Editing by Sandra Mahler
Our standards: Principles of Trust for Thomson Reuters.
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”