ASIC sues NAB for hardship support failure
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The news: The securities regulator has sued National Australia Bank for failing hundreds of customers who applied for hardship support from the big four lender.
The numbers: The Australian Securities and Investments Commission (ASIC) claims between 2018 and 2023, NAB and its subsidiary AFSH Nominees did not respond to 345 applications for hardship support within the 21-day timeframe required by law.
The context: ASIC said it is seeking declarations, pecuniary penalties and adverse publicity orders against NAB and AFSH.
Customers applying for hardship support included people who were domestic violence victims, battling serious medical conditions, and dealing with business closures or job loss, ASIC chair Joe Longo said.
NAB's group executive for customer and corporate services, Sharon Cook, said that NAB disclosed the issue to ASIC in October 2023.
The bank and its subsidiary AFSH say they are considering the detail of the civil penalty proceedings brought by ASIC and will continue to cooperate fully with the regulator.
Under the National Credit Code, if a consumer notifies their lender that they are or will be unable to meet their credit obligations, lenders must consider varying the customer’s credit contract and advise them of the decision within specified timeframes.
Variations to the credit contract can include payment deferrals, reduced payment arrangements, interest-only periods, term extensions, capitalisation of arrears or interest-rate reductions.
What they said: "We're sorry that this happened when a number of customers were in difficult situations and needed us to be there for them," Cook said.
"We are focussed on ensuring these customers receive the support they need.
"Following ASIC's report into hardship practices across the industry, we have also been working on a new approach to supporting customers in financial difficulty."
Longo said: "We allege NAB unlawfully failed to respond to their customers’ appeal for help when they needed them most".
"Amidst rising cost of living pressures, we have seen an increased number of customers reach out to their lenders for relief, and we have seen first-hand the impact on lives and livelihoods when lenders fail to appropriately support customers experiencing financial hardship," he said.
The sources: ASIC media release, ASX announcement
