Key Points
- NAB has been taken to court amid allegations it failed to help hundreds of customers in need.
- ASIC claims NAB failed to respond to 345 customer hardship requests within the 21-day period required by law.
- The hearing is scheduled for May.
National Australia Bank (NAB) has been sued for allegedly failing to properly respond to requests for hardship assistance from some of its most vulnerable customers over a period of almost five years.
A lawsuit filed by the Australian Securities and Investments Commission (ASIC) in the Federal Court claims the bank and one of its subsidiaries failed to respond to 345 customer hardship requests within the deadline. 21 days required by law.
ASIC revealed on Monday it was asking the court to impose fines on NAB and its subsidiary AFSH Nominees.
ASIC chairman Joe Longo said the alleged failures could have made already difficult situations worse for some customers.
“We allege that NAB unlawfully failed to respond to its customers’ call for help when they needed it most,” it said in a statement.
“These clients included people experiencing domestic violence, dealing with serious health issues, business closures or job loss.
“Against a backdrop of increasing pressures on the cost of living, we have seen an increasing number of customers turning to their lenders for help, and we have seen first-hand the impact on lives and livelihoods when lenders fail to adequately support customers facing financial difficulties.
In a statement to the stock exchange, NAB acknowledged the legal action while apologizing to affected customers for a period from October 2018 to September 2023.
Sharon Cook, head of customer and corporate services at NAB Group, said: “We are sorry that this has happened when a number of our customers were in difficult situations and needed us to be there for them .”
“We are ensuring these customers receive the support they need.”
The bank would cooperate with the regulator and is working on a revised approach to dealing with customers in financial difficulty, NAB said in its statement.
If a customer informs a lender that they are unable to meet their credit obligations, lenders, by law, must consider making arrangements to amend their contract and notify them of a decision in a specified time limit.
Longo said ensuring businesses met their obligations in times of financial distress was a priority for ASIC in 2024.
“We will not hesitate to take decisive action when banks and lenders fail to meet their obligations,” he said.
ASIC is seeking declarations, monetary penalties and adverse publicity orders against NAB and its subsidiary.
in 2023 for similar alleged violations involving 229 customers.
The hearing is scheduled for May.
