Westpac is facing a fresh civil suit over IT system and process failures that caused customer hardship notices lodged online to not be passed through to the correct systems or teams.
The Australian Securities and Investments Commission (ASIC) said Tuesday it had brought a case against Westpac in the Federal Court.
It alleges that between 2015 and 2022, 229 Westpac customers didn’t receive a response to their hardship notice within the required 21 days.
A concise statement [pdf] filed by ASIC reveals details of a June 2023 audit that Westpac allegedly commissioned into what went wrong.
It notes that, among other things, “Westpac does not have a consolidated system view of customers for collections and hardship, and inadequate progress in business (and technology) simplification of the multi-brand, multi-systems legacy environment due to years of under-investment.”
The audit is also said to have found that ‘online customer hardship requests are not always sent to collections systems … resulting in either a delay in the outcome provided to customers, or no outcome being provided.”
“Gaps in the online hardship process related to various incidents identified between OneClick, Tallyman, and App105,” the audit is said to state.
Only the role of the first two pieces of software is detailed by ASIC.
“Control weaknesses exist over transfer of hardship requests submitted online (via OneClick) to what is recorded in the relevant collection systems (i.e., Tallyman …).”
ASIC said Westpac had “remediated the affected customers” to the tune of $679,249.90 in direct costs, and paid out an additional $274,573.38 “for non-financial loss”.
But the regulator said “there is also loss and harm that has not been, or cannot be, remediated by Westpac”.
Some customers faced extended periods with poor credit ratings, and “at least 29” became bankrupt, the regulator alleged.
Westpac "acknowledged" the proceedings in an ASX filing, and confirmed they related to a "technology failure".
The bank said it received "approximately 630,000 applications for hardship assistance" in the seven-year period covered by the case.
Group CIO Scott Collary said the bank was "deeply sorry" to the affected customers.
He said processes had been strengthened and online hardship applications upgraded since then.
