Overview
- The Federal Court ordered Westpac to pay a $26 million civil penalty and to cover ASIC’s costs after finding the bank grossly negligent in handling more than 200 online hardship requests.
- Justice Timothy McEvoy concluded the failures ran from 2017 to 2023 and had serious effects on customers who were seeking relief for reasons such as illness, job loss, domestic abuse or natural disaster.
- Westpac self-reported the issues in 2022 and 2023, has completed a remediation program that paid more than $1.7 million to customers, and says it has upgraded online hardship systems to prevent repeats.
- The court rejected Westpac’s proposal of a $10 million penalty as insufficient and noted that the breaches arose from inadequate systems and processes rather than deliberate misconduct.
- Regulators have recently pursued large penalties against other banks and ASIC says the ruling sends a clear signal that lenders must meet legal duties under the National Credit Code to respond to hardship requests promptly.