The Australian Securities and Investments Commission (ASIC) has launched civil penalty proceedings against home loan manager Resimac, alleging it failed to fairly support thousands of customers in financial distress between January 2022 and February 2024.
According to ASIC’s filing in the Federal Court, Resimac— which manages non-bank loans funded by Perpetual Trustee Company — applied a rigid and standardised process to financial hardship applications.
ASIC alleges that Resimac imposed a “one size fits all” model, routinely requesting extensive documentation from applicants without considering whether all of it was relevant or necessary, and in some cases, rejecting applications outright if the standard information wasn’t provided.
“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,” said ASIC deputy chair Sarah Court (pictured).
ASIC alleges Resimac’s handling of hardship notices contravened the requirement under its credit licence to act efficiently, honestly, and fairly, breaching section 47 of the National Consumer Credit Protection Act.
“Not only does this approach fail to treat customers with respect but we contend it is unlawful and breaches the licensee’s obligations,” Court said.
“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.”
This is the first time ASIC has taken action against a credit licensee over its approach to assessing hardship applications.
ASIC is seeking declarations, civil penalties, adverse publicity orders, and costs. The regulator currently has similar proceedings underway against Westpac and NAB for failing to meet hardship response deadlines required by law.
The alleged conduct by Resimac was part of a broader review by ASIC, which assessed 10 lenders’ practices and published its findings in:
“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,” Court said.
In a statement, Resimac Group acknowledged the Federal Court proceedings and admitted its previous processes “could have been better.”
“Resimac acknowledges that its previous practices regarding hardship notices provided by customers could have been better and apologises that this has occurred,” it said.
The company said it has since enhanced its systems, aligned them with ASIC’s recommendations in Report 782, and is developing a Financial Contribution Program to compensate affected customers.
This program is expected to include fee and interest refunds. Resimac added that it is co-operating fully with ASIC’s investigation and will continue to do so.
