ASIC 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.
ASIC alleges that Resimac imposed a 'one size fits all' 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.
ASIC 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, ASIC alleges this conduct contravened Resimac's obligation as an Australian credit licensee to act efficiently, honestly and fairly between 1 January 2022 and 15 February 2024.
ASIC Deputy Chair Sarah Court said, 'This 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.
'As ASIC's 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.
'Not only does this approach fail to treat customers with respect but we contend it is unlawful and breaches the licensee's obligations.
'While we acknowledge that many lenders have responded to ASIC's 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.
