Amount sends clear message to lenders to do better when customers seek help: ASIC deputy chair
Australia’s Federal Court has imposed a pecuniary penalty of $26m on Westpac Banking Corporation for failing to respond to more than 200 online financial hardship requests from vulnerable customers within the period required under the law from 2017–23.
The Australian Securities and Investments Commission (ASIC), the applicant in this case, alleged that Westpac contravened s 72(4) of the National Credit Code and ss 47(1)(a) and (4) of the National Consumer Credit Protection Act 2009 between 4 September 2017 and 8 May 2023.
ASIC also asserted that, between 13 March 2019 and 7 June 2023, Westpac failed to do all things necessary to ensure the fair, honest, and efficient engagement in the credit activities authorised under its credit licence.
Through online notices, retail customers informed Westpac and its subsidiaries – St George Bank, BankSA, and Bank of Melbourne – that they were undergoing financial hardship and struggling with repayment obligations on home loans, credit cards, personal loans, car loans, and other products.
The reasons for such requests included serious health conditions, natural disasters, job losses during the COVID-19 pandemic, and family violence. According to ASIC, Westpac responded to some customers weeks after the statutory deadline and did not respond to some at all.
Westpac substantially admitted to the serious conduct claimed by ASIC, including breaching s 72(4) of the National Credit Code within the agreed contravention period and ss 47(1)(a) and (4) of the National Consumer Credit Protection Act between 13 March 2019 and 7 June 2023.
In Australian Securities and Investments Commission v Westpac Banking Corporation [2026] FCA 651, the Federal Court of Australia accepted that systemic insufficiencies and operational failures led to the contraventions, which were not deliberate. However, the court considered the contraventions grossly negligent.
In its 26 May 2026 decision, the court rejected Westpac’s proposed $10m penalty as “little more than derisory in the circumstances and therefore wholly inappropriate.” The court deemed a $26m penalty just, appropriate, and proportionate in the circumstances, mainly due to:
In fixing the penalty, the court acknowledged Westpac’s:
According to Sarah Court, ASIC deputy chair, the penalty clearly signalled to Westpac and other lenders that they should make an effort to respond better to customers seeking their assistance.
“Instead of providing a safety net for these customers, Westpac’s systemic failures let them slip through the cracks,” Court said in ASIC’s media release.
“When hardship requests are missed or delayed, the harm compounds and causes even greater customer stress,” Court added. “As Australians contend with a higher cost of living, lenders must prioritise their customers, especially those who are struggling financially, and ensure they are given the protections they are entitled to under the law.”
