ASIC’s Corporate Plan 2023-27 includes a priority on enforcement against misconduct involving a high risk of significant consumer harm, particularly conduct that targets financially vulnerable consumers in an environment where scams, digitally-enabled misconduct and predatory lending practices are increasingly prevalent.

ASIC has published an open letter to CEOs of lenders which has been sent directly to 30 large lenders calling on them to make sure they appropriately support customers experiencing financial hardship.

It requests that the letter be shared with their Board and that they discuss with their Board the steps that their organisation is taking to ensure it has appropriate arrangements in place to support and
respond to consumers experiencing financial hardship.

ASIC says it is seeing evidence that an increasing number of customers are experiencing financial distress and difficulty due to cost-of-living pressures. In this context, it is critically important that lenders have appropriate arrangements to respond to and support consumers experiencing financial hardship.

In the letter ASIC sets out its 12 expectations of lenders to meet their obligations. These include:

• proactively communicating how and when customers can seek assistance,
• genuinely considering customer circumstances to develop sustainable solutions where possible, and
• communicating regularly with customers throughout and at the end of the assistance period.

ASIC has reminded lenders that under section 72 of the National Credit Code a lender must consider varying a consumer’s credit contract if a consumer notifies the lender that they are or will be unable to meet their credit obligations.

A credit licensee must also do all things necessary to ensure that the credit activities authorised by their licence are engaged in efficiently, honestly and fairly.

ASIC sues Westpac

ASIC has announced it has sued Westpac for failing to respond to hardship notices within the time required by law.

ASIC alleges that between 2015 and 2022, a deficiency with Westpac’s online hardship notice process resulted in 229 Westpac customers not receiving a response to their hardship notice within the required timeframe of 21 days.

Westpac says the proceedings relate to a technology failure over a period when Westpac received approximately 630,000 applications for hardship assistance.

It says once Westpac identified the incident it self-reported it to ASIC and completed a remediation program including refunds of fees and interest, debt waivers and payments for non-financial loss, totalling approximately $900,000.

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