A growing number of Australians are falling into mortgage hardship as high interest rates bite, and many households are not receiving the help they need, despite approaching their lenders. The regulator says it's closely watching how banks respond to the rising stress of its customers and will not hesitate to take legal action.
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00:00 With high interest rates and the cost of living biting hard, financial counsellors have been
00:06 run off their feet with calls from people struggling to pay their mortgage.
00:11 Counsellors are seeing increased demand, we're seeing people calling with increasing levels
00:15 of stress, people feeling completely overwhelmed.
00:19 Financial regulator ASIC has now released a scathing report accusing Australian banks
00:24 of failing a growing number of customers seeking financial hardship assistance.
00:29 They're in crisis, they've lost their job, they've lost a loved one, they're very ill,
00:35 they could be the victim of family violence.
00:38 These are people that need special attention.
00:41 The report found there'd been a 54% increase in hardship notices from the last quarter
00:46 of 2022 to the last three months of 2023, when the number of borrowers seeking assistance
00:52 jumped to almost 53,000.
00:54 But despite growing levels of mortgage stress, ASIC found that access to financial hardship
00:59 assistance could be hard to come by, and more than a third of customers found it so onerous
01:03 they gave up.
01:04 ASIC Chair Jo Longo said while lenders were making improvements, they had to lift their
01:09 game.
01:10 They've made a bit of progress, but there's a long way to go.
01:12 The head of the Australian Banking Association, Anna Bly, has defended the sector.
01:16 The really encouraging thing here is that of all the customers who put in a full application,
01:22 94% of them got approved.
01:24 We appreciate that the lenders are listening, the ASIC report is clear about what needs
01:30 to be done, and now we expect to see urgent action.
01:34 That could include legal action by the regulator.
01:37 ASIC will take whatever action we think is necessary to ensure compliance with the National
01:42 Credit Code.
01:43 That includes taking banks or lenders to court.
01:46 A warning of more scrutiny to follow.
01:48 [BLANK_AUDIO]