ASIC has today released an open letter to lenders—which has been sent directly to 30 large lenders—calling on them to make sure they appropriately support customers experiencing financial hardship.
ASIC is seeing evidence that an increasing number of customers are experiencing financial distress and difficulty due to cost-of-living pressures. In this context, it is critically important that lenders have appropriate arrangements to respond to and support consumers experiencing financial hardship.
‘The economic environment has shifted over the last year, placing significant financial pressure on everyday Australians,’ said ASIC Commissioner Danielle Press.
‘ASIC reminds lenders that they must have the right arrangements in place to respond to requests for assistance from customers experiencing financial hardship and to work constructively with them to find a sustainable solution.’
In the letter ASIC sets out expectations of lenders to meet their obligations. These include:
proactively communicating how and when customers can seek assistance,
genuinely considering customer circumstances to develop sustainable solutions where possible, and
communicating regularly with customers throughout and at the end of the assistance period.
‘ASIC expects all lenders to seriously consider the expectations outlined in our letter, and to take the necessary action to ensure they fulfil their obligations in supporting their customers,’ added Ms Press.
In response to higher interest rates and cost-of-living pressures, financial hardship will be an area of increased focus for ASIC over the next 12 months.
ASIC’s ongoing work on financial hardship will include data collection from 30 large lenders about hardship applications. In addition, ASIC is undertaking a review of 10 large home lenders to understand their approach to financial hardship. These home lenders were amongst the lenders ASIC has written to. ASIC expects to release findings from this review in early to mid-2024.