The Federal Court found the bank missed statutory deadlines on more than 200 customer requests between 2017 and 2023, rejecting Westpac’s argument for a A$10 million penalty as “derisory”
Westpac Banking Corporation has been ordered to pay A$26 million in civil penalties after Australia’s Federal Court found the bank failed to respond to customer hardship applications within legally required timeframes over a six-year period.
Justice McEvoy found that more than 200 online hardship requests, submitted between 2017 and 2023 by customers of Westpac, St George Bank, Bank of Melbourne and Bank SA, were not handled on time, with some receiving replies weeks after the legal deadline and others receiving no response at all. The affected customers were experiencing financial difficulty with mortgages, credit cards, personal loans and vehicle finance.
Westpac had argued a A$10 million penalty would be appropriate, but McEvoy rejected this, calling such an amount “little more than derisory in the circumstances and therefore wholly inappropriate.” In his ruling, he described the contraventions as very serious, noting they affected vulnerable customers over an extended period and “significantly undermined” the legislative scheme designed to protect them.
Westpac admitted the contraventions during the case and has paid more than A$1.7 million in remediation to affected customers, covering fee and interest reimbursements as well as compensation for non-financial harm. The bank said it self-reported the issues in 2022 and 2023 and has since strengthened its processes and upgraded its online hardship systems.
“We again apologise to any customers who were affected. We are deeply sorry we let them down,” a Westpac spokesperson said, noting the bank received approximately 695,000 hardship assistance requests over the period in question.
ASIC Deputy Chair Sarah Court said the outcome sends a clear message to Westpac and other lenders about the standards expected when handling requests for assistance from customers in hardship.