FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Westpac Banking Corporation [2026] FCA 651

SUMMARY

In accordance with the practice of the Federal Court in cases of public interest, importance or complexity, the following summary has been prepared to accompany the orders made today. This summary is intended to assist in understanding the outcome of this proceeding and is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be available on the internet on the Court’s website. This summary is also available there.

In this proceeding, the Australian Securities and Investments Commission (ASIC) has alleged that Westpac Banking Corporation (Westpac) has contravened s 72(4) of the National Credit Code (Code) and s 47(1)(a) and (4) of the National Consumer Credit Protection Act 2009 (Cth) (Credit Act).

ASIC alleged that between 2 October 2015 and 7 June 2023, Westpac contravened s 72 of the Code by failing to respond to 277 online hardship notices submitted by its retail customers within the time period prescribed by s 72(5) of the Code, or at all. The relevant online hardship notices were submitted to Westpac by vulnerable retail customers who were unable to meet their repayment obligations under a credit contract with Westpac. The reasons for the requests varied, but they included serious health issues, unemployment during the COVID-19 pandemic and family violence.

Westpac’s failures to respond to online hardship notices were the result of systems and operational failures and deficient processes. ASIC also therefore alleged that Westpac did not maintain adequate systems, controls and processes to ensure that online hardship notices were received and responded to within the prescribed statutory timeframes, and that Westpac did not conduct adequate risk reviews, investigations, monitoring and analysis of its hardship systems to ensure that it complied with the Code. For these reasons ASIC alleged that Westpac failed to do all things necessary to ensure that it engaged in the credit activities authorised by its credit licence efficiently, honestly and fairly as required by s 47 of the Credit Act.

Westpac admitted that it had contravened s 47 of the Credit Act, and that it had contravened s 72 of the Code by failing to respond to 223 online hardship notices. Westpac’s position with respect to 54 of the total 277 online hardship notices was that ASIC could not seek declarations in relation to them by reason of the operation of s 175A of the Credit Act. In the reasons for judgment delivered today, the Court has determined in accordance with s 175A of the Credit Act that Westpac was under a continuing obligation to respond to each relevant online hardship notice and that Westpac committed a separate contravention of s 72(4) of the Code each day that it failed to give customers a response. The Court has also determined that s 175A of the Credit Act operates to allow ASIC to seek declarations that Westpac has contravened s 72(4) of the Code even when the obligation to respond to an online hardship notice first arose prior to 13 March 2019.

The Court has therefore accepted that Westpac has contravened the Code with respect to a total of 277 online hardship notices as alleged by ASIC. The Court has also accepted that Westpac failed to engage in credit activities efficiently, honestly and fairly as required by the Credit Act due to its failure to implement adequate systems, controls, risk reviews, investigations, monitoring and analysis of the systems and processes it utilised in relation to online hardship notices. The Court has made declarations in relation to Westpac’s conduct and contraventions, made compliance orders, and also made an order that Westpac publish an adverse publicity notice.

In addition, ASIC sought that Westpac be required to pay a pecuniary penalty for its contraventions of the Code and the Credit Act in the amount of $30 million. It was Westpac’s position that such an amount would be excessive, and that a penalty in the order of $10 million was more appropriate.

Having regard to all of the circumstances, the Court has made an order that Westpac pay a pecuniary penalty to the Commonwealth in the amount of $26 million.

It is relevant to the Court’s determination of the pecuniary penalty amount that Westpac’s conduct was serious and extensive, and that it occurred over a relatively lengthy period. Further, Westpac’s conduct continued even after it had received a number of complaints from customers about “missing” online hardship notices that should have triggered an investigation. In these circumstances the Court has determined that while Westpac’s conduct was not deliberate or reckless, it was grossly negligent. Westpac’s delay in identifying and correcting known issues with its systems warrants a significant pecuniary penalty for the purposes of deterrence. It is also relevant that Westpac is a large financial institution with significant resources and market position, and that it has a history of contraventions of civil penalty legislation in relation to financial services products that were caused by systems failures and that have impacted its retail customers.

Westpac’s conduct in this case impacted some of its most vulnerable customers who were experiencing personal or financial hardship. Westpac’s customers were not only deprived of assistance that they legitimately sought, but in some instances they were the subject of unjustified and premature enforcement action. That action included recording adverse repayment or default information on the credit files of customers and selling a number of accounts to third-party debt collectors. While Westpac has remediated impacted customers to the extent possible, and made payments to them for non-financial loss, it is significant to the Court’s determination that for some of those customers Westpac’s conduct caused irreparable harm. This aspect of Westpac’s conduct makes the contraventions particularly egregious.

However, the Court has also accepted that there are a number of mitigating factors which must result in a penalty amount that is somewhat less than $30 million. Westpac has taken steps to invest in and improve its systems and processes for online hardship notices, including decommissioning the legacy systems involved in the contraventions. Westpac has also co-operated with ASIC and demonstrated some level of contrition for its conduct. Further, and significantly, due to the remediation payments made to impacted customers, it cannot be said that Westpac has profited from the contraventions.

It is for these reasons that the Court has determined that it is appropriate and proportionate that Westpac pay a pecuniary penalty in the amount of $26 million, and that such a penalty would be just and proportionate and give effect to the objectives of specific and general deterrence.

MCEVOY J
26 May 2026
Melbourne