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NAB and subsidiary AFSH Nominees have been hit with a $15.5 million penalty from the Australian Securities and Investments Commission (ASIC).
The court revealed that there were 345 financial hardship applications between 2018 and 2023 that were not responded to in the legally required 21-day time frame.
These incidents were found to have breached the National Credit Code. ASIC deputy chair Sarah Court labelled the contraventions a serious failure.
“These failures likely made an already challenging time in people’s lives far worse. This penalty sends an important message to other financial institutions – customers should be at the centre of what you do,” said Court.
“The hardship regime exists to help customers who are experiencing financial difficulty, often caused by significant life events such as serious illness, sudden unemployment and domestic violence.”
According to ASIC, NAB didn’t respond to these few hundred affected customers until after proceedings were commenced.
NAB was obligated, under section 72 of the credit code, to alter customers’ credit contracts within the time frames.
This could include actions such as payment deferrals, reduced payment arrangements, interest-only periods, term extensions, capitalisation of arrears, or interest-rate reductions.
NAB acknowledges penalty
A statement from the major responded to the contraventions. NAB group executive, customer and corporate services Sharon Cook said: “We’re sorry we let down our customers when they needed our help."
NAB is working alongside ASIC and consumer advocates to address and mitigate these issues.
According to NAB, some of the changes made include:
- Established NAB Care, a team that provides personalised support to customers with specific needs, including those facing financial abuse, unemployment challenges and repeat scams.
- Hired 70 additional colleagues focused on supporting customers in financial hardship.
- Increased the hardship options available to customers, to ensure every customer receives a solution specific to their situation.
- Frontline colleagues have now completed comprehensive training to recognise financial hardship indicators and support customers.
- Established a ‘Sensitive Customer Case Forum’ that regularly brings executives together from across NAB to assess highly complex customer cases and provide personalised solutions.
"There is more to do, and we will continue to find ways to better support our customers who need us," Cook added.
[Related: Fintech ordered to pay $10m for breaching disclosure laws]
