Resimac Group Ltd has acknowledged civil penalty proceedings initiated by ASIC against its subsidiary for alleged breaches related to hardship notices, and is proposing a financial contribution program to compensate affected customers.
- ASIC initiates civil penalty proceedings against Resimac Limited
- Alleged breaches of hardship notice obligations from Jan 2022 to Feb 2024
- Resimac admits past shortcomings and apologizes
- Enhanced hardship processes implemented following ASIC recommendations
- Plans to offer refunds and financial contributions to affected customers
Regulatory Proceedings Unfold
Resimac Group Ltd has publicly acknowledged that its subsidiary, Resimac Limited, is facing civil penalty proceedings initiated by the Australian Securities and Investments Commission (ASIC). The Federal Court action alleges that Resimac breached its obligations under the National Consumer Credit Protection Act (NCCP Act) concerning hardship notices submitted by vulnerable customers between January 2022 and February 2024.
Admission and Apology
Steps Toward Remediation
Since becoming aware of the issues, Resimac has taken steps to enhance its hardship assessment processes, aligning them more closely with ASIC’s recommendations outlined in Report 782 from May 2024. This includes providing greater support to customers facing financial difficulties, an important move given the ongoing economic pressures many Australians face.
Financial Contribution Program
In a proactive gesture, Resimac is developing a Financial Contribution Program aimed at compensating affected customers. This program is expected to include refunds of fees and interest, although the company has not disclosed the potential financial impact. This initiative may help restore some trust among customers and stakeholders, but the final details and scope remain to be seen.
Ongoing Cooperation and Uncertainty
Resimac has stated it is cooperating fully with ASIC’s investigation and continues to consider the matters raised. However, the outcome of the Federal Court proceedings remains uncertain, and the potential penalties or further regulatory consequences could have material implications for the company’s reputation and financial position.
Bottom Line?
Resimac’s next moves in the ASIC proceedings and the rollout of its compensation program will be critical to watch for investors and customers alike.
Questions in the middle?
- What will be the financial cost of Resimac’s Financial Contribution Program?
- How will the ASIC proceedings impact Resimac’s reputation and future regulatory scrutiny?
- What specific changes has Resimac made to prevent future breaches of hardship notice obligations?