National Australia Bank (NAB) is facing Federal Court action initiated by the Australian Securities and Investments Commission (ASIC) for allegedly failing to deal with 345 customers seeking hardship support in a timely fashion.

ASIC announced that it had commenced the action and will be alleging that between 2018 and 2023, NAB and its subsidiary AFSH Nominees Pty Ltd (AFSH) did not respond to 345 hardship applications within the 21-day timeframe required by law.

Commenting on the action, ASIC Chair Joe Longo said: “We allege NAB unlawfully failed to respond to their customers’ appeal for help when they needed them most.

“These customers included people who were domestic violence victims, battling serious medical conditions, dealing with business closures or job loss. NAB’s failures likely compounded the already challenging situation for these people.

“Amidst rising cost of living pressures, we have seen an increased number of customers reach out to their lenders for relief, and we have seen first-hand the impact on lives and livelihoods when lenders fail to appropriately support customers experiencing financial hardship.

“Compliance with financial hardship obligations is an enforcement priority for ASIC in 2024,” he said.

“We will not hesitate to take decisive action when banks and lenders fail to comply with their obligations.”

ASIC is seeking declarations, pecuniary penalties and adverse publicity orders against NAB and AFSH.

NAB group executive, customer and corporate services, Sharon Cook acknowledged the ASIC action and said the bank had disclosed the issue to the regulator in October 2023.

“We are sorry that this happened when a number of our customers were in difficult situations and needed us to be there for them,” she said.

Cook said NAB and AFSH Nominees are now considering the details of the proceedings brought by ASIC and will continue to cooperate fully with the regulator.