The regulator alleges that between 2018 and 2023, National Australia Bank (NAB) and its subsidiary AFSH Nominees did not respond to 345 hardship applications within the 21-day timeframe required by law.
Australian Securities and Investments Commission (ASIC) chair Joe Longo said: “We allege NAB unlawfully failed to respond to their customers’ appeal for help when they needed them most”.
According to Longo, these customers included people who were domestic violence victims, battling serious medical conditions, dealing with business closures or job loss.
“NAB’s failures likely compounded the already challenging situation for these people.
“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.”
“Compliance with financial hardship obligations is an enforcement priority for ASIC in 2024. Earlier this year, we put the lending industry on notice on the release of our hardship report.”
The chair confirmed that ASIC will “not hesitate to take decisive action” when banks and lenders fail to comply with their obligations.
ASIC is seeking declarations, pecuniary penalties and adverse publicity orders against NAB and AFSH.
In an ASX listing on Monday, NAB acknowledged the civil penalty proceedings commenced against it and AFSH Nominees.
NAB group executive, customer and corporate services, Sharon Cook said NAB disclosed the issue to ASIC in October 2023.
“We’re sorry that this happened when a number of our 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. This includes consulting with consumer advocates.”
According to the bank, it and AFSH Nominees are now considering the details of the proceedings brought by ASIC and will continue to cooperate fully with the regulator.
The announcement follows ASIC’s action against Westpac in September 2023 for financial hardship misconduct.
