(May 27): Westpac Banking Corp was told to pay an A$26 million (US$19 million or RM75.3 million) penalty for failing to adequately respond to customers facing financial hardship.

Australia’s Federal Court imposed the fine after finding that the bank didn’t respond to more than 200 online hardship requests within the time specified by law over a nearly six-year period that ended in 2023, according a statement from the Australian Securities and Investments Commission. The requests were made by customers of Westpac and its subsidiaries St George Bank, Bank SA and Bank of Melbourne.

“Westpac failed the very customers who needed help when they needed it most,” Sarah Court, Asic’s deputy chair, said in the statement on Wednesday. “These were customers who were asking for some breathing room for a range of reasons including domestic abuse, natural disasters, serious illness or the loss of their job.”

Justice McEvoy, the judge who handed down the penalty, pointed to “inadequate systems and operational failures,” and said the bank was “grossly negligent” in its conduct. The fact some customers’ debts were sold to third-party debt collectors who tried to recoup the money was “particularly serious,” and added “an additional layer of harm,” to the affected clients, the judge said.

Westpac paid more than A$1.7 million in remediation to affected customers that included refunds of fees and interest and compensation for non-financial loss, Asic said.

Westpac initially self-reported the issues and has since upgraded its online hardship systems, a spokesperson for the bank said in a statement.

“We again apologise to any customers who were affected. We are deeply sorry we let them down,” the spokesperson said.

Uploaded by Magessan Varatharaja