Westpac has copped a $26 million fine for grossly negligent conduct, after failing to respond to vulnerable customers experiencing financial hardship.
On Tuesday, Federal Court Judge Tim McEvoy, concluded that while the conduct wasn’t intentional, it affected hundreds of people from 2017 to 2023.
The Australian Securities and Investments Commission (ASIC) conducted an investigation in 2023 and found the bank had failed to respond to more than 200 online hardship requests from its customers over the six-year-period.
Customers included those who were struggling to keep up with home loan repayments, credit cards, personal loans, car loans and other responsibilities due to various circumstances.
“I accept that Westpac’s contraventions in this case were very serious,” McEvoy said.
“They impacted many vulnerable customers and continued over an extended period. It may in fact be said that the circumstances faced by the affected customers means that their financial vulnerability cannot be overstated.
“While the contraventions were not suggested to be deliberate and arose instead from inadequate systems and operational failures, I have accepted that they were grossly negligent.”
ASIC deputy chairwoman Sarah Court hopes the penalty will act as a reminder to Westpac and other lenders that it is their responsibility to respond better to customers who need help.
“Westpac failed the very customers who needed help when they needed it most,” she said.
“These were customers who were asking for some breathing room for a range of reasons including domestic abuse, natural disasters, serious illness or the loss of their job.
“Instead of providing a safety net for these customers, Westpac’s systemic failures let them slip through the cracks.”
The bank has also been ordered to pay the regulator’s costs.
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