NAB fined $15.5m for failing to answer customers in financial hardship
In a Federal Court decision released on Wednesday, NAB and AFSH Nominees were found to have left hardship applicants in the dark after failing to respond within 21 days.
The Australian Securities and Investments Commission (ASIC) brought the lawsuit.
In her decision, Justice Penny Neskovcin details that people who asked the bank for help were going through medical emergencies, family violence, the pandemic and business failure, natural disasters, and redundancy and unemployment.
'These failures likely made an already challenging time in people's lives far worse,' ASIC deputy chair Sarah Court said.
'This penalty sends an important message to other financial institutions – customers should be at the centre of what you do.'
Justice Neskovcin found NAB and AFSH made a 'high' number of breaches of the National Credit Code, in not providing written responses to 345 hardship notices between 2018 and 2023.
The hardship claims were knocked back by NAB staff incorrectly clicking a 'reject' button in their system. About 6 per cent of 12,600 hardship applications were incorrectly rejected this way.
NAB customer services boss Sharon Cook apologised and said 70 staff had been hired to address the issue.
'We're sorry we let down our customers when they needed our help,' she said.
'We have created NAB Care, a dedicated hardship assistance team, hired 70 new colleagues and increased the support options available to our customers.
'There is more to do, and we will continue to find ways to better support our customers who need us.'
Under the National Credit Code, if someone cannot pay their loan, lenders must consider varying the credit contract and advise them of the decision within specified time frames. Payment deferrals, reduced payment arrangements, interest-only periods, term extensions, capitalisation of arrears or interest-rate reductions are all options to get the loan repayments happening again.
As well as the $15.5m fine, NAB and AFSH have to publish notices about the breaches on their websites.
AFSH Nominees sells mortgages as Advantedge Financial Services.
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