Regulatory Alerts2026-05-27
Federal Court Orders Westpac to Pay $26 Million Penalty for Hardship Failures
The Federal Court has ordered Westpac Banking Corporation to pay a $26 million civil penalty for failing to respond to over 200 customer hardship requests within the legal timeframe between 2017 and 2023. Justice McEvoy determined that the bank's systemic operational failures constituted gross negligence, causing significant harm to vulnerable customers including adverse credit reporting and debt collection actions. ASIC Deputy Chair Sarah Court emphasized that the penalty serves as a critical warning to lenders to prioritize customer protections and ensure efficient, fair handling of hardship applications under the National Credit Code.
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