ASIC sues NAB for failing customers in hardship
The Australian Securities and Investments Commission (ASIC) has filed proceedings against National Australia Bank (NAB) in the Federal Court.
ASIC alleges NAB failed 345 of its customers at their most vulnerable when they applied for hardship support from the bank.
ASIC alleges that between 2018 and 2023, NAB and its subsidiary AFSH Nominees (AFSH) did not respond to 345 hardship applications within the 21-day timeframe required by law.
"We allege NAB unlawfully failed to respond to their customers' appeal for help when they needed them most," ASIC chair Joe Longo said.
"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."
Under section 72 of the National Credit Code, if a consumer notifies their lender that they are or will be unable to meet their credit obligations, lenders must consider varying the customer's credit contract and advise them of the decision within specified timeframes.
Longo said that ASIC had seen an increase in customers seeking relief from lenders as cost-of-living pressures have risen.
"We have seen first-hand the impact on lives and livelihoods when lenders fail to appropriately support customers experiencing financial hardship," Longo said.
"We 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.
This is the second major bank ASIC has acted against for financial hardship misconduct after it filed proceedings against Westpac in September 2023.
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