ASIC's Record $830m Penalty Year: What It Means for Borrowers

Australia's financial watchdog had its toughest enforcement year ever in 2025-26, taking aim at hardship failures by some of the country's biggest banks.

Australia's financial regulator closed out the 2025-26 financial year with its strongest enforcement result on record — $830 million in court-ordered civil penalties and $644 million returned directly to Australians. For mortgage holders, the details of where ASIC focused its firepower are worth understanding.

Australian Broker reports that courts ordered $480 million in penalties in the second half of the financial year alone, against banks, superannuation trustees, and market participants including Westpac, HSBC, Macquarie Securities, and Mercer Super. That came on top of $350 million secured in the first half of the year, taking the total to $830 million.

The single largest case was a $300 million penalty against Union Standard International Group over what the regulator described as "egregious" contracts-for-difference misconduct that harmed retail investors. A separate $33.5 million penalty was ordered against credit provider Walker Stores, trading as Snaffle, over unlawful credit practices that overcharged consumers almost $20 million in excess interest.

ASIC Chair Sarah Court said the regulator was "pursuing cases that expose serious failures in systems, governance, and conduct, from scams and hardship failures to market infrastructure, superannuation, private credit, financial reporting, and digital assets."

Three major banks penalised for hardship failures

For mortgage borrowers, the most directly relevant thread running through the 2025-26 enforcement year is ASIC's action against lenders for failures in how they handle customers in financial difficulty.

Three separate cases resulted in significant penalties against major banks for inadequate hardship responses — all within the one financial year:

- **Westpac** received a **$26 million** penalty for what ASIC described as "widespread failures in responding to customer hardship requests." - **NAB** faced a **$15.5 million** penalty for comparable hardship-related breaches. - **ANZ** was ordered to pay a **$40 million** penalty linked to hardship failures, forming part of a larger $250 million ruling against the bank.

Australian Broker notes this was the third such penalty against a major bank in under a year, marking a pattern ASIC appears intent on pursuing systematically.

These cases are a reminder that Australian consumer credit law gives borrowers meaningful rights when they are struggling to meet repayments. Under the National Credit Code, lenders must consider hardship applications and respond within prescribed timeframes. An institution that fails to do so — as these penalty findings indicate — is not meeting its legal obligations.

If you are finding your repayments difficult to manage, the practical steps are: contact your lender in writing and formally request a hardship variation; keep a clear record of every interaction and response; and if you do not receive a satisfactory outcome, escalate to the Australian Financial Complaints Authority at no cost to you.

Scam compensation is flowing

Beyond the hardship cases, ASIC's enforcement year included significant outcomes for consumers caught up in scams. HSBC had paid around $21.5 million in compensation to affected customers over scam protection failures by mid-July, with further payments expected before the end of July. Separately, nearly $40 million has been refunded to contracts-for-difference investors following other ASIC action.

Court said the regulator's approach was "not just about punishment," but about "detecting misconduct sooner, preventing harm where we can, and securing remediation for those affected."

ASIC also recorded 25 criminal convictions during the year, 21 of them custodial, covering cases involving insider trading and superannuation fraud.

What this means for borrowers right now

For borrowers who are not currently in financial difficulty, the enforcement record serves as a useful reminder that ASIC is actively monitoring whether lenders are holding up their end of the consumer credit bargain. Lender conduct — particularly around hardship — is clearly in the regulator's sights, and that should translate into better responsiveness from institutions that know they are being watched.

For anyone whose rate or loan structure has not been reviewed in some time, now is a reasonable moment to calculate your current repayments and see whether your existing loan is still competitive. The rate environment has been moving, and a loan that was appropriate two years ago may not be the best fit today.

Investors in particular should pay attention to the Moody's Ratings analysis published this week, which flags that investor mortgage delinquencies are likely to rise as the 2026 budget's property tax changes combine with higher interest rates. Reviewing your investor home loan options now — while you are not under financial pressure — gives you far more room to move than waiting until you are.

The record enforcement year is a strong signal that the framework protecting consumers in the credit market is being taken seriously. For borrowers, knowing your rights under that framework remains as important as ever.

Read the full ASIC enforcement year story at Australian Broker.