You would think that banks, of all places, would be the ones to offer a hand when you’re struggling financially. Yet, recent reports show that many Australian banks are ignoring or offering cookie-cutter responses to customers seeking help with hardship. It’s becoming an alarming trend, and unfortunately, it’s a reality many people are dealing with.
A Rising Problem
In 2024-2025, over 2,900 customers reported their banks failed to respond to requests for hardship assistance, reports The Guardian. That’s a shocking number, and it’s been rising for years. Despite various regulatory crackdowns and repeated warnings, banks continue to let their customers down during difficult times. According to Natalie Cameron, the lead ombudsman for banking and finance at the Australian Financial Complaints Authority (Afca), people’s requests for help are still being ignored. The worst part? Many of the responses that do come through are automated and don’t take into account the individual circumstances of the customer.
The Pitfalls of Automated Bank Systems
It’s a frustrating cycle that doesn’t seem to end. The big banks are guilty of relying too heavily on automated systems, generating responses that feel more like a template than a genuine effort to understand someone’s unique situation. Smaller lenders aren’t much better—they often don’t even have automated systems in place to address these hardship requests at all. So, where does that leave the person on the other end of the line? Likely feeling helpless and unheard, if not worse.
The Human Cost
Domenique Meyrick, CEO of Financial Counselling Australia, points out that this situation is out of hand. She explains that when customers reach out for support, they often don’t get the help they need. And it’s not for lack of trying—the teams at these banks may be undertrained or unsupported, leaving customers stuck in a frustrating limbo. “There’s no excuse for silence when someone’s asking for help,” she says. And she’s right. When banks fail to respond to requests for repayment relief, it doesn’t just damage their relationship with the customer. It can worsen the financial situation, pushing people into even more debt.
The consequences of this are serious. When banks don’t respond to requests for payment flexibility or extensions, it forces some people to turn to high-risk borrowing just to make ends meet. This can lead to a vicious cycle of worsening debt, with no real support from the institutions that should be helping.
Regulatory Actions, But Not Enough
While the Australian Securities and Investments Commission (Asic) has taken action against some major players like ANZ and NAB—both of which have faced financial penalties—there’s still a long way to go. These ongoing failures highlight the need for better systems, more empathetic responses, and ultimately, more human support from banks during times of financial hardship.
The surge in hardship requests, driven by cost-of-living pressures, shows that many Australians are struggling more than ever. Victoria, in particular, has recorded the highest number of hardship requests, which reflects the broader economic challenges many are facing. It’s no surprise, then, that Afca has received over 100,000 complaints about financial institutions in just one year.
A Step Toward Resolution
Unfortunately, as one financial counsellor, Claire Tacon, points out, too many borrowers are left confused about their rights. They call their banks in search of leniency, only to be met with silence or inadequate help. When that happens, she advises people to contact Afca directly. While Afca can sometimes resolve issues, it often comes after unnecessary stress and anxiety.
One particular case stands out: a long-time bank customer, struggling with financial hardship in both 2022 and 2023, found herself receiving a default notice from her bank after reaching out for help. Afca found the bank had acted improperly and ordered it to pay her $2,250 in compensation. It’s one small victory, but it highlights a larger problem that’s affecting many Australians.
