Latest news with #NationalCreditCode
Sky News AU
9 hours ago
- Business
- Sky News AU
NAB hit with $15 million fine following shameful act towards struggling Aussies
NAB and its subsidiary AFSH Nominees Pty Ltd have been ordered to pay $15.5 million following a Federal Court case decision made on Wednesday. The big four bank was fined following an investigation where it had failed to respond to hundreds of Australians doing it financially tough. Between 2018 and 2023, NAB and AFSH did not respond to 345 hardship applications within the required 21-day timeframe. Affected customers were left unaware for more than three weeks and didn't know if they would be given leniency. "These failures likely made an already challenging time in people's lives far worse," Australian Securities and Investments Commission (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. "This penalty sends an important message to other financial institutions – customers should be at the centre of what you do.' Justice Penny Neskovcin said affected customers had asked NAB for help in relation to medical emergencies, family violence, natural disasters, redundancy, and business failures. Justice Neskovcin added NAB and AFSH breached provisions of the National Credit Code. None of the 346 customers who didn't hear back in the required time frame suffered any losses. Justice Neskovcin said the situation could have been helped 'If NAB had provided the affected NAB customers and AFSH customers with the required notices in response to their hardship notices within the prescribed timeframes'. NAB was ordered to pay $13 million while AFSH Nominees will fork out $2.5 million, as well as ASIC's court costs. They will also be required to publish a publicity notice on their website and provide a copy of the notice to affected customers. The notice will provide customers the details of Justice Neskovcin's court order. 'The failures resulted (with a few limited exceptions) from the incorrect use by NAB staff of a particular functionality in its internal system used to manage hardship notices,' the notice reads. 'The causes have since been identified, and NAB has taken steps to address those causes. 'Since ASIC commenced court proceedings, NAB and AFSH have provided affected customers with a response to their hardship notice and conducted a remediation program which included remediation payments and the correction of repayment history information for some affected customers.' has reached out to NAB for comment. Meanwhile, much needed relief arrived on Tuesday as the Reserve Bank of Australia cut interest rates for the third time of 2025. The central bank lowered the cash rate from 3.85 per cent to 3.6 per cent. The National Debt Helpline revealed over 168,000 people reached out for help in the 2024-25 financial year, making it the biggest spike in numbers since 2018-19.
Perth Now
15 hours ago
- Business
- Perth Now
‘Far worse': NAB cops $15m fine
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. NAB failed to respond to hardship application from people going through family violence and natural disasters. NewsWire / Kelly Barnes Credit: News Corp Australia '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. From September 30, Advantedge will stop accepting new home loan applications. From next year, all Advantedge loans will be moved over to NAB.
9 News
a day 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
Sky News AU
22-05-2025
- Business
- Sky News AU
Snaffle sued by ASIC for allegedly inflating prices, overcharging customers hundreds of dollars on tech, home goods
An Aussie online store is being sued for allegedly inflating prices and overcharging customers that were making repayments on household items and tech goods. Join to watch the full interview with ASIC on its decision to sue Snaffle from 4.30pm. Online retailer Snaffle, that offers consumers credit payments, is being taken to court by the Australian Securities and Investments Commission for allegedly boosting the price of goods by circumventing the cap on interest repayments. Australia has a 48 per cent annual repayment cap on credit contracts used to purchase goods and pay them off over time. The corporate watchdog alleges Snaffle added arbitrary charges on top of its interest rate including mark ups, a profit margin and a delivery fee which the company never actually incurred. ASIC claims this allowed Snaffle to charge interest rates of between 60 and 103 per cent. It alleges Snaffle was able to breach the cap by purchasing goods through its parent company Walker Stores before reselling them to other entities it was linked with to increase the price. Snaffle would then sell the good to customers with interest added on top of the already inflated price, according to ASIC. The watchdog also claims Snaffle incorrectly applied a flat interest rate for the whole time customers made repayments on more than 40,000 credit contracts instead of calculating the interest on the unpaid balance. Under Australia's National Credit Code, a company is required to reduce the interest over time as loan is repaid. Snaffle is also being sued for allegedly failing to properly disclose the real cash price of the goods advertised on its website or the amount of credit it was providing shoppers. The company's website shows consumers a low weekly price they can pay, alongside the upfront price, but does not tell shoppers the total cost of the repayments. ASIC Deputy Chair Sarah Court said the watchdog took this alleged conduct very seriously and warranted legal action. 'We're taking this to court because we do think this is egregious conduct,' Ms Court told reporters on Thursday. 'We know that consumers are facing enormous living costs. That is well understood.' Ms Court also said the customers who were allegedly overcharged by Snaffle were those struggling with price pressures, making the smaller charges over a long period of time more attractive. 'If they could afford to pay for these goods up front they'd be paying a whole lot less than they're paying under these contracts,' Ms Court said. 'Our concern is that in all of those circumstances artificially inflating the base price and then adding significant interest charges on top is simply charging consumers in this hostile living environment things that they should not have to pay, things that we allege are breaking the law.' ASIC outlined three cases of the alleged overcharging by Snaffle. Some shoppers who chose to enter credit contracts to purchase a 7.5kg front loading washing machine, which retailed for $477, ended up paying $1,549 over three years. This was $648 more than they should have for this product, ASIC alleges. Similarly, consumers who purchased a 315L fridge, with a retail value of $797, paid up to $835 more than they should have and shoppers who paid off a $1,487 iPhone over three years paid up to $1,433 more, ASIC argues.
