ASIC has released its report REP 782 Hardship, hard to get help: Findings and actions to support customers in financial hardship which sets out the key findings from its review of 10 large home loan lenders in late 2023 to understand how they are supporting customers experiencing financial hardship.
Under section 72 of the National Credit Code a hardship notice is given when customers advises their lender of their inability to meet their obligations under a credit contract.
In response, the lender must consider whether to vary the customer’s credit contract to assist the customer in meeting their obligations and notify the customer of their decision.
ASIC observed that the reasons why a customer may experience financial hardship are many and varied. They include unemployment, injury and/or illness, and separation from a partner.
ASIC concluded that lenders were not doing enough to support their customers experiencing financial hardship. In the worst cases, lenders ignored hardship notices, effectively abandoning customers who needed their support.
The poor practices ASIC observed were:
- Lenders didn’t make it easy for customers to give a hardship notice;
- Assessment processes were often difficult for customers;
- Lenders didn’t communicate effectively with customers;
- Vulnerable customers often weren’t well supported.
The report includes suggestions from ASIC on practical actions that lenders can take to support customers.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
