ob体育 alleges thousands of home loan customers suffering financial distress were impacted by the failure of Resimac Limited to ensure it provided appropriate care when responding to hardship applications as required by its credit licence.
Resimac manages non-bank loans provided by Perpetual Trustee Company Limited.
ob体育 alleges that Resimac imposed a 鈥榦ne size fits all鈥� approach to hardship applications, and that it typically requested extensive standard information from vulnerable customers without considering whether all of it was relevant and reasonably necessary in light of their individual circumstances and any information they had already provided to Resimac.
ob体育 also claims that when vulnerable customers did not provide any of the standard information, Resimac summarily rejected their hardship applications.
In civil penalty proceedings filed with the Federal Court, ob体育 alleges this conduct contravened Resimac鈥檚 obligation as an Australian credit licensee to act efficiently, honestly and fairly between 1 January 2022 and 15 February 2024.
ob体育 Deputy Chair Sarah Court said, 鈥楾his approach was particularly unfair for customers experiencing vulnerability, for example, related to domestic and family violence, bereavement, separation or poor health, who were least likely to be in a position to provide the required standard information.
鈥楢s ob体育鈥檚 report on hardship last year showed, failures in the approach and time taken to assess hardship applications can cause significant consumer harm, with many customers withdrawing from the process. Lenders and managers of consumer loans must do more to support customers in difficult financial circumstances, and not put up barriers or apply a faceless, cookie-cutter approach.
鈥楴ot only does this approach fail to treat customers with respect but we contend it is unlawful and breaches the licensee鈥檚 obligations.
鈥榃hile we acknowledge that many lenders have responded to ob体育鈥檚 demand to improve their practices and frameworks for assessing hardship applications, it comes as too little, too late for many customers experiencing financial distress', Ms Court said.
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Background
This is the first time ob体育 has acted against a credit licensee for alleged failures in their approach to assessing hardship applications. ob体育 is seeking declarations, penalties, adverse publicity orders and costs.
ob体育 currently has ongoing proceedings against Westpac and National Australia Bank for failing to respond to customers鈥� hardship notices within the time required by law.
Resimac was one of ten lenders ob体育 reviewed in late 2023 to understand how they are supporting customers experiencing financial hardship. The findings of that review were published in Report 783 Hardship, hard to get help: Lenders fall short in financial hardship support (REP 783).
In May 2024, ob体育 published Report 782 Hardship, hard to get help: Findings and actions to support customers in financial hardship (REP 782) about how lenders should support their customers experiencing financial hardship.