Sept 5 (Reuters) – The Australian corporate regulator said on Tuesday it would bring legal action against Westpac Banking Corp (WBC.AX) over its alleged failure to respond to customer financial hardship notices between 2015 and 2022 within the required administrative time frame.
under Section 72 of the Australian National Credit ActAn individual with late payments can request that the terms of their credit contract be changed on the basis of financial hardship, and creditors are expected to provide a written response within 21 days of being informed.
Westpac shares fell nearly 1% to A$21,630 by 0105 GMT, versus a 0.6% decline in the broader benchmark index (.AXJO).
The Australian Securities and Investments Commission (ASIC) said it had commenced civil penalty proceedings in the Federal Court against Westpac noting that deficiencies in the online lender’s hardship notice process resulted in 229 Westpac customers not receiving a timely response.
The actions against Westpac come as regulators have turned to increased scrutiny against Australian lenders taking into account all the recent notices issued to banks in relation to data on fees charged to indigenous customers, and banks not following the required guidance for home loans, and pushing for a better position. How to deal with bank fraud, etc.
Damien Rooney, director of equity sales at Argonaut, said: “I absolutely believe that increased scrutiny is justified and, politically, it is easy for governments and regulators to look at the ‘fat cats’.”
The company said the legal proceedings were related to a “technology failure” and that Westpac had completed a remediation program for affected customers including payments for a non-pecuniary loss of approximately A$900,000 (US$581,310.00).
The regulator said Westpac could have done more to investigate and correct system issues affecting the online hardship notification process.
“This error meant we were not providing some of our customers with the help they needed. We deeply regret this,” Westpac Group Chief Information Officer Scott Collari said.
($1 = 1.5482 Australian dollars)
(Reporting by Roshni Nair in Bengaluru; Preparing by Muhammad for the Arabic Bulletin) Editing by Sandra Maler and Sherry Jacob Phillips
Our standards: Thomson Reuters Trust Principles.
“Beer aficionado. Gamer. Alcohol fanatic. Evil food trailblazer. Avid bacon maven.”