Author: SteelEye
13 August 2025
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Fine Amount: $15,500,000
Primary Violation: Failure to provide written responses to customer hardship notices within statutory timeframes
Relevant Period: 13 March 2019 – 30 September 2024
Overview
The Australian Securities and Investments Commission (ASIC) obtained a Federal Court judgment against National Australia Bank Limited (NAB) and its subsidiary Advantedge Financial Services Holdings Pty Ltd (AFSH), imposing a $15.5 million pecuniary penalty for admitted contraventions of section 72(4) of the National Credit Code.
The violations stemmed from systemic failures to send written responses to customer hardship notices, affecting debtors under credit contracts, with NAB handling processes on behalf of both entities via its PowerCurve system.
National Australia Bank (NAB) and its subsidiary Advantedge Financial Services Holdings (AFSH) failed to respond in writing to hardship notices submitted by customers within the 21-day timeframe required under section 72(4) of the National Credit Code. This affected 345 NAB customers and 63 AFSH customers between November 2018 and October 2023, resulting in 345 initial contraventions and over 415,000 continuing daily contraventions after March 13, 2019, due to the ongoing obligation to respond.
The failures stemmed from NAB Assist staff incorrectly using the "reject hardship request" activity in the PowerCurve system, which managed hardship processes for both NAB and AFSH. This activity removed accounts from the hardship workflow without sending any response notice or related communication, except in six NAB cases where use was appropriate and one where a withdrawal confirmation was sent. The incorrect usage rate was about 6% of reviewed rejected notices, totaling 746 instances from October 2016 to October 2023.
Customers submitted hardship notices for reasons including unemployment, reduced hours, medical conditions, pandemics, family breakdowns, and financial difficulties (e.g., unexpected expenses, business downturns). Examples from NAB cases:
The contraventions were not deliberate but arose from systemic issues in process and system usage. NAB and AFSH admitted the violations early, cooperated with ASIC, implemented corrective measures (e.g., restricting the activity, daily reviews), and conducted remediation.
In response to hardship notices referenced in paragraphs 13 to 16 of the SAFA, NAB Assist staff applied the "reject hardship request" activity in PowerCurve where reasons did not align with intended uses, except for six NAB customers.
NAB Assist has used PowerCurve since about 2016 for hardship management, including approving or declining arrangements.
On 19 March 2020, a credit card customer (contract dated 14 October 2016) submitted a hardship notice stating, "I was let go from my job due to company cut backs in relation to the corona virus. My whole department was let go and as I am still in my probationary period they only had to give me a weeks notice."
On 21 June 2022, a home loan customer (contract dated 9 October 2014) reported, "We are a family of 5 and all had Covid at different times, my husband being the last one of us to get Covid, therefore he was required to lockdown or over 5 weeks... My husband works for himself and there we had absolutely no income coming in for almost two months."
On 28 March 2021, a home loan customer (contract dated 6 November 2014) stated, "With Jobkeeper finishing I will not be earning as much due to reduced hours at the Sports Centre where I work. We currently have 2 x home loans and it is just the smaller amount of $704.00 due on the 01/04/21 that I will not be able to cover for this month only."
The total penalty was $15,500,000
"The failures to provide responses to the hardship notices referred to in paragraphs 13 to 16 of the SAFA were as a result of NAB Assist staff using the “reject hardship request” activity (Activity) in PowerCurve in response to a hardship notice in circumstances where, with the exception of six NAB customers, the reasons for the use of the Activity did not fall within any of its intended uses." (From the Supplementary Statement of Agreed Facts dated 2 May 2025)
"NAB handled all aspects of the hardship process on behalf of the Respondents including via its NAB Assist team (a team at NAB dedicated to managing collections, hardship and deceased estate functions for personal and business banking)." (From the Supplementary Statement of Agreed Facts dated 2 May 2025)
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