<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A big four </span><a href="http://9news.com.au/banks" rel="" target="" title="bank"><span>bank</span></a><span> and one of its subsidiaries have been ordered to pay $15.5 million for failing to respond to struggling customers.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The Federal </span><a href="http://9news.com.au/courts" rel="" target="" title="Court"><span>Court</span></a><span> yesterday ordered </span><a href="http://9news.com.au/nab" rel="" target="" title="National Australia Bank"><span>National Australia Bank</span></a><span> (NAB) and AFSH Nominees to pay the penalty for failing to respond to 345 hardship applications within the legally mandated 21-day timeframe.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Justice Penelope Neskovcin said the reasons customers gave for their hardship included medical issues or emergencies, bereavement, family violence, family breakdown, the pandemic, business failure, natural disaster and unemployment.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/sa-royal-commission-into-dv-about-to-be-handed-down/02996a64-aa60-40ed-80b3-0143e6625a10"><strong><span>Victoria was one of four women killed in a single week</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>She said the breached National Credit Code provisions were important to help protect customers and the number of breaches was "high, indicating the significant scope – and thereby the seriousness – of the contravening conduct".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The Australian Securities and Investments Commission (ASIC), which brought the action, said the penalty highlighted the seriousness of the failures to support customers facing financial hardship.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"These failures likely made an already challenging time in people's lives far worse," ASIC deputy chair Sarah Court said.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/nab-and-subsidiary-ordered-to-pay-15-million-after-asic-takes-court-action/ca013234-6c12-4a1e-8280-a3f6ffc93b35" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This penalty sends an important message to other financial institutions – customers should be at the centre of what you do."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>While the customers didn't suffer any specific losses, the court made a "reasonable inference" the failure to respond might have "compounded any financial difficulty those customers considered themselves to be under and any associated distress".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The parties agreed maximum penalties could have extended well into the hundreds of millions but the judge found the figures were so high as to be "practically meaningless" and accepted the proposed penalty of $15.5 million.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/slacks-creek-brisbane-queensland-man-dead-police/ac3c7745-7679-494c-93b2-c8dc208831a2" rel="" target="" title=""><strong><span>Body found on footpath near park identified</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"ASIC will not hesitate to take action when banks and lenders fail to comply with their obligations."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The court ordered NAB to pay $13 million and AFSH Nominees to $2.5 million, while also both covering ASIC's costs.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It found the failures did not involve senior management at either company.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The court considered the total fine, which is 0.22 per cent of NAB's net profit for 2024, to be a substantial deterrent.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The proposed penalty of $15.5 million is substantial and ought not be regarded by NAB (or a comparably sized business) as an 'acceptable cost of doing business', and it can be expected to deter any potential wrongdoer from engaging in similar contravening conduct," Neskovcin wrote.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The breaches occurred between 2018 and 2023, both companies took measures to ensure they weren't repeated and NAB apologised to those affected.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Sixty customers were paid an average of about $540 each for the financial and non-financial impact of the breaches.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>ASIC had flagged in May last year that lenders weren't doing enough to support customers in financial hardship.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The law allows mortgageholders who don't think they'll be able to meet their payments to inform their lender, who must then reply or ask for more information within 21 days.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The hardship regime exists to help customers who are experiencing financial difficulty, often caused by significant life events such as serious illness, sudden unemployment and domestic violence," Court said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://www.9news.com.au/national/how-to-follow-9news-digital/29855bb1-ad3d-4c38-bc25-3cb52af1216f"><em><strong><span>DOWNLOAD THE 9NEWS APP</span></strong></em></a><em><strong><span>: Stay across all the latest in breaking news, sport, politics and the weather via our news app and get notifications sent straight to your smartphone. 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