Financial hardship conversations require more than repayment assessment. Credit and collections teams need skills to recognise distress, manage difficult interactions, respond safely to serious disclosures and identify hardship notices in line with ASIC expectations.
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The hardship call is never just about money.
Behind the missed repayment there is a diagnosis, a redundancy, a separation, a gambling problem, a death in the family. Hardship advisors know this. They hear it every day.
What they often do not have is a way to respond to it that keeps the customer safe, keeps themselves steady and still gets the hardship assessment done.
That is a skills gap. It is also a compliance one.
‘People in Australia are increasingly experiencing financial hardship. The increase of the cost of living means more people are living pay check to pay check. Often the financial hardship is one of many ongoing challenges for individuals. The bill they can’t pay is the last straw that tips them over into distress.’
What ASIC expects now
ASIC has made financial hardship an enforcement priority. In May 2024 its Report 782 found lenders were not doing enough to support customers experiencing financial hardship. The regulator found an inadequate focus on the customer in hardship policies, processes and practices, with numerous examples of customers not treated with sufficient care.
The penalties followed. In August 2025 the Federal Court ordered NAB and its subsidiary AFSH to pay $15.5 million for failing to respond to customers’ hardship notices within the time required by law. Proceedings against other major lenders continued through 2025.
ASIC’s September 2025 follow-up, Report 815, acknowledged improvement but was clear that lenders still need to do more. It recommended lenders enable hardship identification across every channel and ensure teams are equipped to identify hardship notices wherever they appear.
Read that last line again. Equipped to identify. That is a people capability, not a system setting.
Where the conversation breaks down
Hardship conversations fail in predictable ways.
The customer is ashamed and says nothing. They call about a “billing question” and never mention they have not eaten properly in a week. The advisor does not ask, so the hardship notice is never triggered. Emotions creep in and customers start displaying anger or violence with no obvious reason.
The customer discloses something serious. Family violence. Thoughts of suicide. The advisor shares helplines, or rushes to call the police and get off the call as soon as possible. It moves the conversation straight into risk assessment and process rather than looking at the person, and their need to be heard. The customer feels dismissed at the worst possible moment.
In both scenario the advisor absorbs it all. Call after call. They are not counsellors, they are not mental health professionals. Nobody trained them to set the load down.
What hardship teams need
Four capabilities, in this order.
Recognising distress under the surface. Hardship is often unspoken. Advisors need to hear the cues and ask the question that opens the door. Under the National Credit Code, a hardship notice can be verbal and informal. If your advisor does not recognise it, the clock never starts.
Staying regulated under anger. The customer’s anger is usually distress. An advisor who can stay steady and connect first will get to the hardship conversation faster than one who argues about the arrears.
Responding to disclosure safely. When someone mentions suicide, family violence or crisis, the advisor needs a framework. Connect. Ask. Listen. Know how to get support without abandoning the person mid-call.
Recovering between calls. Emotional demands are a psychosocial hazard. Employers are obliged to manage them. Training that teaches advisors how to reset is part of that control.
Compliance and care two sides of the same coin
ASIC wants hardship identified across every channel and customers treated with care. WHS regulators want emotional demands and customer aggression controlled. Your customers want to be heard.
All three point to the same thing: advisors who can hold a high-emotion conversation without a script.
CALM Conversations’ Managing Strong Emotions program is built for hardship teams, financial services, utilities and telco. Suicide Conversations in the Workplace is built for hardship advisors and contact centre managers who may encounter crisis on the phone. Both sit on the CALM method, developed from frontline suicide-intervention practice and adapted for people who are not clinicians.
Key takeaways
- NAB and AFSH were ordered to pay $15.5 million in August 2025 for failing to respond to hardship notices in time. Source: ASIC media release 25-165MR
- ASIC’s Report 782 (May 2024) found lenders were not doing enough to support customers in hardship. Source: ASIC Report 782
- ASIC’s Report 815 (September 2025) noted improvement but said lenders still need to do more. Source: ASIC Report 815
- A hardship notice under section 72 of the National Credit Code can be given verbally. Source: ASIC
Frequently asked questions
What is a hardship notice under Australian credit law?
Under section 72 of the National Credit Code, a hardship notice is any indication from a customer that they are or will be unable to meet their credit obligations. It can be verbal. Lenders must then consider varying the contract and respond within set timeframes.
Why do hardship teams need emotional distress training?
Because hardship is usually tied to a distressing life event, and because ASIC expects staff to identify hardship in any channel. Advisors who cannot recognise distress or respond to it safely miss hardship notices and expose customers and themselves to harm.
Does this training apply outside banking?
Yes. Utilities, telcos, buy-now-pay-later providers, debt collectors and government agencies all hold hardship conversations and face the same dynamics.
