A coalition of the country’s leading consumer organisations is calling on Australia’s major banks to make significant updates to their industry code to improve outcomes for customers. The Consumers’ Federation of Australia’s (CFA) submission of behalf of the coalition to the 2021 review of the Australian Banking Association (ABA) Banking Code of Practice (the Code) sets out over 100 recommendations.
“Australia’s banks need to continue to evolve and improve their culture, moving away from a focus on the short-term to enhancing people’s financial wellbeing,” said Gerard Brody, CEO Consumer Action.
“The 100 plus recommendations are designed to help make the Code a more valuable document, especially for customers experiencing vulnerability. The Code has an important role to play in improving banking culture, processes, systems and ultimately customer outcomes. The Code must have teeth and should not just be a box ticking compliance exercise,” he said.
The recommendations cover a wide range of topics including:
·a call to treat buy-now-pay-later products and wage pay apps as if they were subject to national credit laws
·providing greater protection for customers from scams
·improving access to interpretation and language services, and
·improving the enforceability of the Code.
In the period since its last review, the Code underwent a plain language rewrite, the banks faced a Royal Commission and committed to reform. Australia has also experienced extreme weather events and the COVID-19 pandemic has impacted many peoples’ day to day and financial lives.
“It’s fair to say the responses and the conduct of the ABA and its members throughout this period has been mixed. In some areas, the banks have provided real assistance to consumers. However, there remain areas where we see bank conduct not meeting community expectations, often resulting in significant harm, most commonly felt by those who are doing it tough,” Mr Brody said.
Despite the lessons of the Financial Services Royal Commission, reported breaches of the Code suggest that systemic and cultural problems continue to exist within banks.
“Banks still too often report ‘human error’ as the main cause of Code breaches, without properly identifying the root cause. The ABA needs to use this review to improve the protections in the Code, but also to increase the focus within banks on achieving genuinely good consumer outcomes and increasing Code compliance.”
Read the full submission here.
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567 email@example.com