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The Australian Securities and Investments Commission (ASIC) alleges that Resimac failed to provide adequate care when handling financial hardship applications, breaching its credit licence obligations.
Thousands of struggling home loan customers were reportedly affected.
According to ASIC, Resimac applied a ‘one-size-fits-all’ approach to hardship requests, often demanding extensive standard documentation from vulnerable borrowers without assessing whether all the information was necessary, given their individual circumstances or prior disclosures.
Additionally, ASIC claims that if customers failed to provide any of the requested documents, Resimac automatically rejected their hardship applications without further consideration.
In civil penalty proceedings filed in the Federal Court, ASIC alleges that Resimac violated its duty as an Australian credit licensee to act efficiently, honestly, and fairly between 1 January 2022 and 15 February 2024.
“This approach was particularly unfair for customers experiencing vulnerability, for example, related to domestic and family violence, bereavement, separation or poor health, who were least likely to be in a position to provide the required standard information,” said ASIC deputy chair Sarah Court.
“As ASIC’s report on hardship last year showed, failures in the approach and time taken to assess hardship applications can cause significant consumer harm, with many customers withdrawing from the process. Lenders and managers of consumer loans must do more to support customers in difficult financial circumstances, and not put up barriers or apply a faceless, cookie-cutter approach.
“Not only does this approach fail to treat customers with respect but we contend it is unlawful and breaches the licensee’s obligations. While we acknowledge that many lenders have responded to ASIC’s demand to improve their practices and frameworks for assessing hardship applications, it comes as too little, too late for many customers experiencing financial distress.”
Resimac has since responded to the allegations, saying that practices “could have been better.”
The lender is developing a financial contribution program to assist affected customers. This includes refunds of fees and interest.
Resimac is continuing to co-operate with ASIC on the matter to reach a resolution.
“Resimac acknowledges that its previous practices regarding hardship notices provided by customers could have been better and apologises that this has occurred. Since becoming aware of the issue, Resimac has enhanced its processes to give greater support to customers facing financial difficulties, in accordance with ASIC’s recommendations in ASIC Report 782 of May 2024,” said Resimac.
