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This is a joint submission made on behalf of members of the Consumers’ Federation of Australia (CFA), the peak body for consumer organisations in Australia.

CFA represents a diverse range of consumer organisations, including most major national consumer organisations. Many of us regularly interact with the Australian Banking Association (ABA) and its members, both when representing our clients in disputes, and as advocates for the purpose of improving banking outcomes for consumers more broadly.

Several representatives of our organisations are also current members of the ABA’s Consumer Outcomes Group. Recognising our expertise and perspective, the ABA provided some resourcing to the CFA to support the development of this joint submission.

In the period since the last Code review, the Code underwent a plain language rewrite, the banks faced a Royal Commission and committed to reform, Australia has experienced numerous extreme weather events, and the COVID-19 pandemic has impacted many peoples’ day to day and financial lives. 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, demonstrating a genuine desire to treat consumer outcomes as a priority and working collaboratively with our organisations to address consumer harms. However, there remains a number of areas where bank conduct disappoints consumers.

While some issues are new, most relate to concerns raised by our organisations for years. Many of these issues continue to result in significant harm to consumers, most often impacting those who are more vulnerable, with bank conduct sometimes contributing to that vulnerability.

Despite the lessons of the Financial Services Royal Commission, there still appears to be systemic and cultural problems within banks that are not being recognised as such. We are concerned that banks still too often report ‘human error’ as the main cause of Code breaches, without properly identifying the root cause.

More important than improving the protections in the Code is the need for the banks to put more work into seeking to truly rectify problems within bank cultures, processes and systems that do not prioritise consumer outcomes.

We urge the Code Reviewer and the ABA to approach this review with the goal of addressing problems at their source, to improve the overall approach to Code compliance.

Read the full submission (PDF).