Regulator alleges bank failed to respond to 345 hardship applications
National Australia Bank (NAB) has acknowledged civil penalty proceedings initiated by the Australian Securities and Investments Commission (ASIC) in the Federal Court, alleging breaches of the National Credit Code.
The case, filed on Nov. 15, involves NAB and its subsidiary AFSH Nominees (Advantedge) and focuses on 345 hardship applications submitted between October 2018 and September 2023.
ASIC alleged that NAB and AFSH failed to respond to hardship applications within the 21-day timeframe required by law. According to the regulator, the affected customers included individuals dealing with domestic violence, serious medical conditions, job losses, and business closures.
National Australia Bank failed 345 of its customers at their most vulnerable when they applied for hardship support from the bank, according to documents filed by ASIC in the Federal Court today https://t.co/sH6fyPetqH pic.twitter.com/Yele4GPsv9
— ASIC Media (@asicmedia) November 17, 2024
“We’re sorry that this happened when a number of our customers were in difficult situations and needed us to be there for them,” NAB group executive for customer and corporate services Sharon Cook (pictured above left) said in a statement. “We are focused on ensuring these customers receive the support they need.”
According to ASIC chair Joe Longo (pictured above right), the bank’s inaction compounded already difficult situations for its customers.
“We allege NAB unlawfully failed to respond to their customers’ appeal for help when they needed them most,” he said.
“Amid rising cost-of-living pressures, we have seen an increased number of customers reach out to their lenders for relief. Compliance with financial hardship obligations is an enforcement priority for ASIC in 2024. We will not hesitate to take decisive action when banks and lenders fail to comply with their obligations.”
ASIC is seeking declarations, financial penalties, and adverse publicity orders against NAB and AFSH. The legal action comes more than a year after ASIC brought similar proceedings against Westpac for alleged financial hardship misconduct.
Cook said that NAB has been working on a new approach to financial hardship support following ASIC’s earlier report into industry practices. She added that the bank is consulting with consumer advocates to improve its processes.
NAB and AFSH said they are reviewing the legal proceedings and intend to cooperate fully with the regulator.
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