Financial Hardship and Debt Collection: What ASIC’s Report 832 Means for Lenders

ASIC’s car finance review in June got most of its headlines for the fees. One customer paid more than $9,000 in establishment fees on a $49,000 loan. Plenty of people lost their car and still owed most of the debt afterwards.

The finding that got less attention is the one collections teams should actually sit up for. ASIC found lenders still chasing people for debt collection after a hardship arrangement had already been agreed. Collections staff and outsourced agencies working accounts without registering that the customer was in hardship, or had a complaint open.

Nobody sets out to hound a customer who’s asked for help and been granted it. That’s the uncomfortable bit. These lenders all had hardship policies. What they didn’t have was a reliable way to make the arrangement stick once it left the hardship team and hit the collections schedule. The policy said one thing. The system kept doing another.

It’s worth understanding why this happens, because it’s not really a car finance problem and it’s almost never a policy problem.

Key Takeaways

• ASIC’s Report 832 (June 2026) found lenders chasing debt collection after a hardship arrangement was already in place
• Collections teams and outsourced agencies weren’t reliably registering active hardship arrangements or open complaints
• It’s the same problem ASIC has found in three previous reviews. Solid policies, shaky execution
• The pressure is building underneath: fewer new arrears, but the ones that exist are bigger and harder to resolve
• ASIC has said it’ll take action against lenders and intermediaries that fall short
• The gap lives in the handoff between hardship, complaints and collections, not in any single policy document
• Good tooling can hold activity automatically and prove it did. The governance obligations stay with the regulated entity

 

What ASIC Found

Report 832 went through more than 350,000 loans across eight car finance providers, some of them among the largest in the country. The main story was about fees and about lenders not keeping a close enough eye on the dealers and brokers selling their loans. Commissioner Alan Kirkland’s line on that was blunt: responsibility for consumer outcomes can’t be outsourced.

Dig into how customers were treated once they fell behind, though, and the collections picture gets uncomfortable. ASIC found hardship applications being knocked back, and customers being contacted about collection, while a hardship variation was already on file. Internal collections teams and third-party agencies weren’t consistently picking up that an arrangement or a complaint was live on the account.

Where you lived made a difference too. ASIC found outcomes varied by location and by lender, with fewer hardship variations approved in regional and remote areas than elsewhere. Same obligations, different experience depending on your postcode.

The review was about car loans. The failure isn’t specific to cars. ASIC has said before that its hardship findings are meant to be read by every credit provider, and the mechanics of the problem are the same whether the debt sits against a vehicle, a mortgage or a personal loan. If hardship, complaints and collections run as separate workflows in your shop, you’ve got the same exposure.

 

Why It Keeps Happening

Report 832 isn’t the first time ASIC has landed on this. It’s the fourth.

Reports 782 and 783 in 2024 found lenders leaning too hard on collections objectives and not doing enough to get people sustainable outcomes. Report 815 the following year gave credit for progress but said there was still work to do. And here’s 832, finding a version of the same thing again, in a different part of the market.

When a problem turns up that consistently, across that many lenders, you can rule out the obvious explanations. It isn’t that compliance teams can’t write a decent hardship policy. They can, and they do. The policies are thorough. They get signed off. They show up in board packs. The trouble starts after that, when the policy has to turn into a set of actions across teams that frequently don’t share a system.

 

The Timing Isn’t Helping

If households were comfortable right now this would matter less. They’re not.

Roy Morgan had roughly 30% of mortgage holders in its at risk of stress bracket through the June 2026 quarter, the fifth month running that figure climbed, with the cash rate sitting at 4.35%. But the number that matters more for anyone running a portfolio is one from Equifax: the count of people missing payments has been fairly flat, while the dollar value of mortgage arrears is up close to 7% on the year and the average loan in late-stage delinquency has pushed past $400,000.

So the topline arrears figures can look steady while the cases underneath them get heavier and slower to clear. More of the people you’re dealing with are in genuine strife rather than just behind by a fortnight. That means more hardship arrangements, more complaints sitting alongside live collections activity, and more opportunities for the handoff to drop the ball, right at the point where a regulator is paying closer attention than it has in years.

 

What Actually Fixes It

What separates the operations that get this right is that the arrangement changes what the system does, not just what the file says.

The mechanism that matters most is a status change that actually changes behaviour. When a case flips to hardship, complaint or dispute, collections activity on it should stop on its own. Not a note someone might read. A status that suppresses scheduled messages, holds automated escalations, and is visible to everyone touching the account, including any agency working it on your behalf. If the pause depends on a person remembering to pull a campaign, you’ve built the exact gap ASIC keeps writing up.

Coming back out is its own trap. ASIC’s earlier work found a big share of customers fell straight back into arrears the moment their assistance period ended. So re-entry into standard collections shouldn’t be automatic. When an arrangement finishes, the case is better surfaced for a human to look at than dropped back onto the conveyor belt. Sometimes the customer’s ready to resume. Sometimes they need another conversation. A system that can’t tell the difference will manufacture the next complaint for you.

And when someone asks what happened, and eventually someone will, whether it’s ASIC, AFCA or your own audit, the record needs to be in one place. If the story is scattered across a collections log, a separate hardship system and an agency’s spreadsheet, you can’t easily show that the arrangement was recognised and the activity was held. From a regulator’s point of view, if you can’t evidence it, it might as well not have happened. One trail, covering communications, case activity and who did what, is what turns a defence into a timeline.

 

Where This Leaves You

If you’re already on a dedicated collections platform

Don’t take the hardship functionality on trust. The real question is whether a hardship or complaint status genuinely stops activity across every channel and every third party, and whether you could stand behind that if asked. So test it. Put a live case into hardship and watch what happens to the next scheduled action. If it keeps going until someone intervenes manually, that’s the gap, and it’s worth fixing before it’s found for you.

If you’re still running on spreadsheets and manual handoffs

This is the tougher spot. Manual handoffs between hardship, complaints and collections are precisely where ASIC’s findings tend to live, because they rely on people passing information along without fail while they’re flat out. It holds together at low volume. It starts to strain as cases get more complex, which is the way the numbers are heading. The risk doesn’t announce itself. It just sits there until it turns into a complaint or a please-explain from a supervisor.

If you’re weighing up a change

Put status-based suppression, controlled re-entry and a single audit trail at the top of the list, not in the nice-to-have column. Make any vendor show you, live, what happens to scheduled activity when a case goes into hardship. And ask specifically how those controls reach an outsourced agency working your accounts, because ASIC has been clear that handing the work to someone else doesn’t hand over the responsibility.

 

The Space Between the Policies

The thread running through four ASIC reviews is that the damage rarely happens inside the hardship policy or inside the collections policy. It happens in the space between them, where a status change in one system is supposed to stop something in another and doesn’t. That’s where customers get hurt and where lenders get caught.

The operations that come through the next stretch of supervisory pressure in reasonable shape will be the ones that stopped relying on people to hold the policy in their heads under load, and build it into how the work runs instead. With household stress spreading and ASIC openly saying it’ll act, it’s not the kind of thing that keeps well.

If it’d help to talk through how 365 Collect handles the hardship-to-collections handoff, and where it fits around the governance work your organisation owns, get in touch with our team.

 

FAQs

What did ASIC’s Report 832 say about collections?

Published in June 2026, Report 832 reviewed more than 350,000 car loans across eight lenders. Alongside the fee and third-party oversight concerns, it found lenders contacting customers about debt collection when a hardship variation was already in place, and collections teams and agencies not reliably registering live hardship arrangements or complaints. ASIC has said it’ll take action where lenders or intermediaries fall short of their obligations.

We’re not a car lender. Does any of this apply to us?

Yes. The review looked at car finance, but the failure it describes, the handoff between hardship, complaints and collections breaking down, applies to any operation running those functions separately. ASIC has said its hardship findings are meant to be read by all credit providers.

Isn’t a good hardship policy enough?

It’s necessary, but on its own it hasn’t been enough. The pattern across ASIC’s reviews is lenders with sound policies still failing in execution, because the policy doesn’t automatically stop the next scheduled collections action. The gap is in the workflow, not the document.

What’s the one control worth getting right first?

Status-based suppression. When a case moves to hardship, complaint or dispute, collections activity on it should stop automatically and visibly, including for any outside agency on the file, without someone having to pause it by hand.

How does outsourced collections fit into this?

ASIC’s position is that responsibility for consumer outcomes can’t be outsourced. If an agency works your accounts, a hardship or complaint status has to reach them and hold their activity too, and you need to be able to show it did. Service provider governance stays with you as the regulated entity.

Does a platform make us compliant?

No. It supports operational resilience and gives you the control and evidence layer that makes parts of the framework workable day to day. Board accountability, operating model design, service provider governance and business continuity all remain with the regulated entity.

This blog is intended as general guidance only and does not constitute legal or compliance advice. We recommend consulting your compliance team or legal advisors for advice specific to your organisation.