Latest news with #AFSHNominees
Yahoo
5 days ago
- Business
- Yahoo
NAB, AFSH fined for neglecting customers in financial distress
The Federal Court has mandated that National Australia Bank (NAB) and its subsidiary, AFSH Nominees (AFSH), pay a total of A$15.5m ($10.1m) in penalties for their inadequate response to customers experiencing financial difficulties. In May 2024, the Australian Securities and Investments Commission (ASIC) highlighted concerns within the lending sector through the release of a hardship report, indicating that lenders were not adequately supporting customers facing financial challenges. The institutions have also consented to cover the costs incurred by the ASIC. The Court's findings revealed that from 2018 to 2023, NAB and AFSH failed to address 345 hardship applications within the legally required 21-day period. Consequently, these customers were left uninformed about the status of their applications for assistance. NAB and AFSH acknowledged their failure to respond to the 345 hardship applications within the stipulated timeframe, admitting that they did not take action until after ASIC initiated legal proceedings. This oversight was attributed to staff incorrectly using a "reject" button in their system, resulting in a lack of communication with customers regarding their hardship applications. In addition to the financial penalty, NAB and AFSH must publish an adverse publicity notice on their websites and distribute a copy of this notice to each affected customer. ASIC deputy chair Sarah Court said: 'This decision highlights the seriousness of the failures of NAB and AFSH to support their customers experiencing financial hardship. '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.' In August 2023, ASIC sent an open letter to the CEOs of all lenders, outlining its emphasis on financial hardship and its expectations for lenders. Following this, ASIC gathered data from 30 major lenders and assessed 10 large home lenders to evaluate their handling of financial hardship cases. The review included an analysis of lenders' policies and procedures, case studies, and hypothetical customer scenarios to identify variances in their approaches to hardship. "NAB, AFSH fined for neglecting customers in financial distress" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Australian
5 days ago
- Business
- The Australian
NAB fined $15.5m for failing to answer customers in financial hardship
National Australia Bank and a subsidiary have been fined more than $15m for failing to respond to hardship applications, with one executive conceding customers deserved better. 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. NAB failed to respond to hardship application from people going through family violence and natural disasters. Picture: NewsWire / Kelly Barnes '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.' NAB says it has hired 70 staff in a new dedicated hardship assistance unit. Picture: NewsWire / Glenn Campbell 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. From September 30, Advantedge will stop accepting new home loan applications. From next year, all Advantedge loans will be moved over to NAB. In a letter sent to affected customers, NAB customer services executive Jocelyn Turner told them what the bank had fixed since the wave of hardship rejections. 'Our customers deserved better from us, particularly during their most challenging financial moments,' Ms Turner said. 'We have taken our response extremely seriously and have been working alongside ASIC to improve our approach.' As well as the 70 new staff, more hardship options are available to people, and frontline NAB staff have completed training to recognise financial hardship indicators. Executives from across the bank also now met to discuss particularly sensitive and complex hardship cases to provide 'personalised solutions', Ms Turner said. 'As a result of these actions, more customers are receiving hardship support through NAB,' she said. 'While this reflects the unfortunate reality that many Australians continue to face financial challenges, the increasing referral rate also means more customers are receiving help. 'Importantly, we are helping them in the early stages enabling them to recover more quickly.' Read related topics: National Australia Bank Blair Jackson Reporter Blair's journalism career has taken him from Perth, to New Zealand, Queensland and now Melbourne. Blair Jackson
Daily Telegraph
6 days ago
- Business
- Daily Telegraph
NAB fined $15.5m for failing to answer customers in financial hardship
Don't miss out on the headlines from Breaking News. Followed categories will be added to My News. National Australia Bank and a subsidiary have been fined more than $15m for failing to respond to hardship applications, with one executive conceding customers deserved better. 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. NAB failed to respond to hardship application from people going through family violence and natural disasters. Picture: NewsWire / Kelly Barnes '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.' NAB says it has hired 70 staff in a new dedicated hardship assistance unit. Picture: NewsWire / Glenn Campbell 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. From September 30, Advantedge will stop accepting new home loan applications. From next year, all Advantedge loans will be moved over to NAB. In a letter sent to affected customers, NAB customer services executive Jocelyn Turner told them what the bank had fixed since the wave of hardship rejections. 'Our customers deserved better from us, particularly during their most challenging financial moments,' Ms Turner said. 'We have taken our response extremely seriously and have been working alongside ASIC to improve our approach.' As well as the 70 new staff, more hardship options are available to people, and frontline NAB staff have completed training to recognise financial hardship indicators. Executives from across the bank also now met to discuss particularly sensitive and complex hardship cases to provide 'personalised solutions', Ms Turner said. 'As a result of these actions, more customers are receiving hardship support through NAB,' she said. 'While this reflects the unfortunate reality that many Australians continue to face financial challenges, the increasing referral rate also means more customers are receiving help. 'Importantly, we are helping them in the early stages enabling them to recover more quickly.' Originally published as 'Deserved better': NAB fined $15.5m for failing to answer customers in financial hardship
News.com.au
6 days ago
- Business
- News.com.au
NAB fined $15.5m for failing to answer customers in financial hardship
National Australia Bank and a subsidiary have been fined more than $15m for failing to respond to hardship applications. 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.
9 News
6 days ago
- Business
- 9 News
NAB and subsidiary ordered to pay $15.5 million after ASIC takes court action
Your web browser is no longer supported. To improve your experience update it here A big four bank and one of its subsidiaries have been ordered to pay $15.5 million for failing to respond to struggling customers. The Federal Court yesterday ordered National Australia Bank (NAB) and AFSH Nominees to pay the penalty for failing to respond to 345 hardship applications within the legally mandated 21-day timeframe. Justice Penelope Neskovcin said the reasons customers gave for their hardship included medical issues or emergencies, bereavement, family violence, family breakdown, the pandemic, business failure, natural disaster and unemployment. The Federal Court yesterday ordered National Australia Bank (NAB) and AFSH Nominees to pay the penalty for failing to respond to 345 hardship applications within the legally mandated 21-day timeframe. (SMH) She said the breached National Credit Code provisions were important to help protect customers and the number of breaches was "high, indicating the significant scope – and thereby the seriousness – of the contravening conduct". The Australian Securities and Investments Commission (ASIC), which brought the action, said the penalty highlighted the seriousness of the failures to support customers facing financial hardship. "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." While the customers didn't suffer any specific losses, the court made a "reasonable inference" the failure to respond might have "compounded any financial difficulty those customers considered themselves to be under and any associated distress". The parties agreed maximum penalties could have extended well into the hundreds of millions but the judge found the figures were so high as to be "practically meaningless" and accepted the proposed penalty of $15.5 million. ASIC deputy chair Sarah Court said the penalty highlighted the seriousness of the failures to support customers facing financial hardship. (Alex Ellinghausen) "ASIC will not hesitate to take action when banks and lenders fail to comply with their obligations." The court ordered NAB to pay $13 million and AFSH Nominees to $2.5 million, while also both covering ASIC's costs. It found the failures did not involve senior management at either company. The court considered the total fine, which is 0.22 per cent of NAB's net profit for 2024, to be a substantial deterrent. "The proposed penalty of $15.5 million is substantial and ought not be regarded by NAB (or a comparably sized business) as an 'acceptable cost of doing business', and it can be expected to deter any potential wrongdoer from engaging in similar contravening conduct," Neskovcin wrote. The breaches occurred between 2018 and 2023, both companies took measures to ensure they weren't repeated and NAB apologised to those affected. Sixty customers were paid an average of about $540 each for the financial and non-financial impact of the breaches. ASIC had flagged in May last year that lenders weren't doing enough to support customers in financial hardship. The law allows mortgageholders who don't think they'll be able to meet their payments to inform their lender, who must then reply or ask for more information within 21 days. "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," Court said. banks Australia finance Bendigo courts NAB Cost of Living CONTACT US
