Monday , January 18 2021
Home / Business / NAB to crack down on ‘debt vultures’ as financial stress surges

NAB to crack down on ‘debt vultures’ as financial stress surges

With the number of consumers in hardship soaring as hundreds of thousands of people put their mortgage payments on hold, the bank said its action was aimed at protecting customers from potentially ending up in a worse situation.

NAB’s group executive for personal banking, Rachel Slade, said customers were in vulnerable situations due to the pandemic and the bank was hearing “very difficult” stories from customers every day. “We continue to check in with our customers who have requested payment deferrals due to the impact of COVID-19 and know many still need our support through this crisis,” Ms Slade said in a statement.

“However, we also understand that some customers won’t be able to bounce straight back. As more Australians seek help it is important that we no longer deal with unlicensed, fee-charging debt management providers.”

General manager of NAB Assist, Campbell Morrison, said the bank would continue dealing with licensed debt management firms on the basis of allowing customers choice. He said the bank dealt with about 500 debt management firms, of which about half were unlicensed, and about 2000 customers a year were engaging their services.

Consumer Action Law Centre chief executive Gerard Brody, who referred to debt management firms as “debt vultures,” welcomed NAB’s move and expressed hope other banks would take similar action. Even so, he said tighter regulation of the sector by government was ultimately needed. “I would like to see stronger regulation, to be honest,” Mr Brody said.


A 2018 Senate economics inquiry concluded debt management firms rarely improve a customer’s financial position, and it recommended the government implement a regulatory framework for debt management firms, including a licensing regime.

Banks are bracing for a sharp increase in customers in financial hardship due to soaring unemployment caused by the pandemic, with latest figures from NAB showing it had deferred 98,189 home loans and 39,528 business loans. The bank has said between 15 and 20 per cent of customers with deferred loans have resumed their payments.

Get our Morning & Evening Edition newsletters

About admin

Check Also

Virgin eyes ‘former glory’ after major C-suite appointments

“There’s an industry here that needs to be rebuilt,” she said. “So I put quite …