ASIC takes Resimac to court for ignoring mortgage customer seeking home loan hardship

Resimac ignored customers seeking home loan relief, including chasing a suicidal customer for $540 and a DV victim whose husband cleared shared bank accounts, a court case against the non-bank lender alleges.

ASIC deputy chair Sarah Court. Picture: NewsWire / Martin Ollman

The corporate regulator has alleged the ASX-listed non-bank lender Resimac ignored thousands of customers seeking home loan relief, including a family violence victim whose spouse drained their joint financial accounts.

In a case filed in the Federal Court and a test of the regulator’s powers, the Australian Securities & Investments Commission has alleged a credit licensee failed vulnerable customers.

Resimac, which writes home loans and provides asset financing, used a “one size fits all” approach to hardship applications, and demanded excessive information “without considering whether all of it was relevant and reasonably necessary in light of their individual circumstances”, ASIC alleged.

This could include requiring six months of income statements.

ASIC deputy chair Sarah Court said Resimac’s approach was “particularly unfair for customers experiencing vulnerability”.

Ms Court said Resimac, one of several problematic lenders identified by an ASIC review, had fallen on the wrong side of obligations to act efficiently and honestly.

“We think if you’re a credit provider you have to do better in your conduct,” she said.

“The message of the case should be to send a message to credit licensees and non-bank lenders that these hardship obligations apply to them and the way they interact with their customers.”

Ms Court said Resimac failed its customers experiencing domestic violence, bereavement, separation or poor health “who were least likely to be in a position to provide the required standard information”.

Resimac said it had improved its hardship handling since ASIC’s report.

Court documents show some Resimac customers told the lender its demands were overwhelming given the chaos in their lives.

One customer seeking to postpone a $540 arrears payment told Resimac she couldn’t handle the volumes of paperwork after a “complete mental breakdown”.

“OK, I don’t leave my room. I can’t fill out forms anymore … I don’t have the capacity to go through 15 pieces of paper and connect all the information and download this and collect that, and I can't, I just can’t do that any more, OK,” the borrower told Resimac.

“I literally never leave my room except to go to my psychiatrist … if a default notice gets sent, it gets sent … I just want to die, OK. I can’t live like this anymore. I can’t do forms, I can’t jump through hoops … I’m sick of it.”

In another example, Resimac demanded a domestic violence victim repay her loans after her husband had cleared their shared bank accounts.

The case against Resimac comes in the wake of ASIC saying the lender was being watched in a report into hardship handling in late 2023.

Despite this, ASIC alleges Resimac continued to be in breach of its credit license conditions through to at least February 15, 2024.

ASIC alleges Resimac’s conduct contravened its licence from 2022 to the start of 2024.

Only in October 2023 did Resimac put in place a documented set of policies and procedures to support customers experiencing hardship, but ASIC alleges the lender still continued to apply its “one size fits all” approach into 2024.

Ms Court said Resimac’s failures, despite identifying the issue, were “not unusual”.

“I can’t say we’re particularly surprised,” she said.

Ms Court said ASIC had found many customers were withdrawing from hardship applications due to constraints and difficulties following through with them.

“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,” she said.

ASIC has separately sued Westpac and National Australia Bank, also alleging they failed to respond to hardship applications in a timely manner.

Ms Court said for many, the improvement in hardship handling standards was “too little, too late”.

“Not only does this approach fail to treat customers with respect, but we contend it is unlawful and breaches the licensee’s obligations,” she said.

Resimac is among the largest non-bank lenders in the Australian market, writing loans for borrowers who fall outside the big banks.

The group’s home loan book is worth more than $12bn.

The group said it had improved its support processes in the wake of ASIC’s report.

“Resimac is developing a Financial Contribution Program for affected customers, including refunds of fees and interest, which it proposes to implement,” the company said.

“Resimac is considering the matters raised by ASIC, has co-operated with ASIC's investigation and will continue its co-operation.”

Resimac shares fell 4.1 per cent to 81.5c on Wednesday.

Originally published as ASIC takes Resimac to court for ignoring mortgage customer seeking home loan hardship