The Federal Court found NAB and subsidiary Advantedge Financial Services (AFSH) failed to respond to 345 hardship relief requests within the three-week legal limit.

The breaches occurred between 2018 and 2023, affecting home loan, personal loan, and credit card customers.

Some mortgage borrowers waited more than five years for a response.

By law, when a borrower in financial hardship contacts their lender, the lender must consider adjusting the contract, perhaps allowing payments to be deferred or loan terms extended.

The lawsuit was brought by the Australian Securities and Investments Commission (ASIC), with deputy chair Sarah Court saying the finding "sends an important message to other financial institutions".

"The hardship regime exists to help customers who are experiencing financial difficulty, often caused by significant life events such as serious illness, sudden unemployment, and domestic violence," she said.

"These failures likely made an already challenging time in people's lives far worse."

The failure to respond to hardship requests stemmed from NAB staff incorrectly using a 'reject' button in the bank's systems.

This error – impacting around 6% of borrowers requesting hardship – meant those lodging requests didn't receive a response from the bank or its subsidiary.

NAB has since taken measures to correct the issue.

"We have taken our response extremely seriously and have been working alongside ASIC to improve our approach to helping customers experiencing financial difficulty," NAB customer services executive Jocelyn Turner said in a letter to consumer advocates.

"While we have made progress, there is still work ahead." 

The bank has created a dedicated team for customers facing specific challenges such as financial abuse, unemployment, and repeat scams, added 70 hardship staff, broadened assistance options, improved training, and introduced an executive forum for complex cases.

The Federal Court judgement comes after the watchdog slammed home loan lenders in a review of 10 mortgage providers earlier this year.

It found one third of borrowers seeking hardship support dropped out of the process at least once, often due to lenders making support hard to access and failing to communicate effectively.

Of the 345 customers who didn't receive a response to their hardship request, 282 were NAB customers while 63 held products with AFSH.

News NAB will soon shut down the AFSH brand broke in June 2025.

The lender will stop accepting home loan applications as of 30 September, with all AFSH mortgages migrated to NAB products in 2026.

Image by Bahnfrend on Wikimedia Commons

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