Acknowledgment of the Proceedings
Australia's Westpac Banking Corp (NYSE: WBK) confirmed on Tuesday its awareness of the legal proceedings initiated by the nation's corporate watchdog. The allegations are centered around the bank's negligence in addressing its customers' financial hardship notices during the period 2015 to 2022.
Technology Glitch to Blame
The Australian Securities and Investments Commission (ASIC) associated these legal proceedings with a "technology failure." According to Westpac's email response to Reuters, 229 financial hardship assistance applications recorded between 2015 and 2022 were not assessed within the stipulated 21-day period.
Westpac Group's Chief Information Officer, Scott Collary, expressed remorse over the oversight, stating, "This error meant we didn't provide some of our customers with the help they needed. For this, we are deeply sorry."
The Legal Framework
As per Section 72 of Australia's National Credit Code, individuals with overdue payments are allowed to request a modification in their credit contract terms due to financial hardships. It is mandated for the creditors to furnish a written response within 21 days after receiving the notification.
Volume of Hardship Assistance Applications
During the alleged breach duration, Westpac disclosed to Reuters that they had processed approximately 630,000 applications for hardship assistance.