Key Points
- The civil action will be launched in the Federal Court on Tuesday.
- ASIC said it was taking legal action to highlight the importance of lenders responding to hardship notices within the required timeframe.
- The date for the first case management hearing is yet to be scheduled.
Australia's oldest bank is being taken to court after the corporate watchdog alleged it failed to respond to financial hardship notices from hundreds of customers.
The civil action will be launched in the Federal Court on Tuesday and involves 229 Westpac customers impacted by the bank's online hardship notice process.
The Australian Securities and Investments Commission alleges that between 2015 and 2022 the customers did not receive a response to their hardship notices within the required 21 days.
"Submitting a hardship notice, which results in a change to the credit contract, can be a lifeline for people experiencing challenging financial circumstances," ASIC Deputy Chair Sarah Court said in a statement.
ASIC said it was taking legal action to highlight the importance of lenders responding to hardship notices within the required timeframe to reduce harm to their customers.
"Westpac's failures to respond to these notices compounded their customer's difficult financial circumstances," Ms Court said.
Under the National Credit Code, a lender has 21 days to notify a customer signalling hardship if it does not agree to change the contract or if it requires further information to make its decision.
ASIC further claims Westpac didn't do enough to investigate and rectify systems issues affecting its online hardship notification process.
The date for the first case management hearing is yet to be scheduled.
