ASIC has today released an open letter to lenders—which has been sent directly to 30 large lenders—calling on them to make sure they appropriately support customers experiencing financial hardship.
ASIC is seeing evidence that an increasing number of customers are experiencing financial distress and difficulty due to cost-of-living pressures. In this context, it is critically important that lenders have appropriate arrangements to respond to and support consumers experiencing financial hardship.
‘The economic environment has shifted over the last year, placing significant financial pressure on everyday Australians,’ said ASIC Commissioner Danielle Press.
‘ASIC reminds lenders that they must have the right arrangements in place to respond to requests for assistance from customers experiencing financial hardship and to work constructively with them to find a sustainable solution.’
In the letter ASIC sets out expectations of lenders to meet their obligations. These include:
- proactively communicating how and when customers can seek assistance,
- genuinely considering customer circumstances to develop sustainable solutions where possible, and
- communicating regularly with customers throughout and at the end of the assistance period.
‘ASIC expects all lenders to seriously consider the expectations outlined in our letter, and to take the necessary action to ensure they fulfil their obligations in supporting their customers,’ added Ms Press.
In response to higher interest rates and cost-of-living pressures, financial hardship will be an area of increased focus for ASIC over the next 12 months.
ASIC’s ongoing work on financial hardship will include data collection from 30 large lenders about hardship applications. In addition, ASIC is undertaking a review of 10 large home lenders to understand their approach to financial hardship. These home lenders were amongst the lenders ASIC has written to. ASIC expects to release findings from this review in early to mid-2024.
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List of lenders and lending groups that received ASIC’s letter
- Allied Credit Pty Ltd
- American Express Australia Limited
- AMP Bank Limited
- Australia and New Zealand Banking Group Limited
- Bank of Queensland Limited
- Bendigo and Adelaide Bank Limited
- Bluestone Mortgages Pty Ltd
- Commonwealth Bank of Australia
- Credit Union Australia Limited
- Firstmac Limited
- Heritage and People's Choice Limited
- HSBC Bank Australia Limited
- Humm Group Limited
- ING Bank (Australia) Limited
- La Trobe Financial Asset Management Limited
- Latitude Group Holdings Limited
- Liberty Financial Group Limited
- Macquarie Group Limited
- MoneyMe Limited
- National Australia Bank Limited
- Newcastle Greater Mutual Group Ltd
- Nissan Financial Services Australia Pty Ltd
- Pepper Money Limited
- Plenti RE Limited
- Resimac Limited
- Suncorp-Metway Limited
- Toyota Finance Australia Limited
- Volkswagen Financial Services Australia Pty Ltd
- Westpac Banking Corporation
- Zipmoney Payments Pty Ltd
Background
Under section 72 of the National Credit Code credit providers must consider varying a customer’s credit contract if a customer notifies the credit provider that they are or will be unable to meet their credit obligations.
Credit providers must also do all things necessary to ensure that the credit activities authorised by their licence are engaged in efficiently, honestly and fairly.
Based on early engagement with some lenders, ASIC has identified several areas that are important for lenders to focus on to ensure they meet their obligations to customers experiencing financial difficulty. These expectations are outlined in the letter to lenders.
ASIC’s Moneysmart website has information for consumer on what to do if you are experiencing financial hardship. If you have multiple debts, or would like help applying for financial hardship, contact the National Debt Helpline on 1800 007 007 to talk to a financial counsellor for free.