A woman exits the ground floor of an office building bearing the Westpac logo amid the easing of coronavirus disease (COVID-19) restrictions in Sydney’s central business district, Australia, June 3, 2020. REUTERS/Lauren Elliott Obtain licensing rights
Sep. 5 (Reuters) – Australia’s corporate regulator said on Tuesday it will take legal action against Westpac Banking Corp (WBC.AX) over its alleged failure to respond to clients’ notices of financial difficulty between 2015 and 2022 within the required administrative timeframe.
under Section 72 of the Australian National Credit ActAn individual with payments in arrears can request a change in the terms of their credit contract based on financial difficulties, and creditors are expected to provide a written response within 21 days of being notified.
Shares of Westpac were down nearly 1% at A$21,630 by 0105 GMT, against a 0.6% drop in the broader benchmark (.AXJO).
The Australian Securities and Investments Commission (ASIC) said it has initiated civil penalty proceedings in federal court against Westpac citing that deficiencies in the online lender’s notice of difficulties process resulted in 229 Westpac customers not receiving a response in a timely manner.
The actions against Westpac come as regulators have resorted to increasing scrutiny against Australian lenders given all the recent notifications issued to banks in relation to statements about fees charged to original customers, banks not following required guidance for home loans, and pressing for a better position. How to deal with bank fraud, etc.
“I absolutely think the increased scrutiny is justified, and politically it’s easy for governments and regulators to look at ‘fat cats’,” said Damien Rooney, director of equity sales at Argonaut.
The company said the legal action was related to a “technological failure” and that Westpac had completed a remediation program for affected customers including payments for a non-financial loss of approximately A$900,000 ($581,310.00).
The regulator said Westpac could have done more to investigate and correct system problems affecting the online hardship notification process.
“This error means that we are not providing some of our customers with the help they need. We deeply regret this,” said Westpac Group chief information officer Scott Colari.
($1 = 1.5482 Australian dollars)
(Reporting by Roshni Nair in Bengaluru; Reporting by Mohamed for The Arabic Bulletin) Editing by Sandra Mahler and Sherry Jacob Phillips
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