In March,six of Australia’s financial giants hadpaid or offered $4.7 billion to compensate customers who suffered loss or detriments after being charged fees for no service or receiving non-compliant advice.
The Banking Code Compliance Committee report said some banks noted the incidents found by the committee were exceptions that did not reflect the broader effectiveness and success of their current systems and processes.
“While they recognised the poor practices and non-compliance with the code that the inquiry identified,they viewed many of these instances as aberrations rather than the norm,” the report read.
Chief executive of the Australian Banking Association (ABA),Anna Bligh,said the country’s banks had made significant improvements in the way they assist families when handling deceased estates.
“It is disappointing that this report does not accurately reflect these efforts,” she said.
The ABA said there were several shortcomings with the report.
“Disappointingly,the report does not note the steady decline in breaches relating to deceased estates during 2021 and 2022,a result of many improvements made by banks,” Bligh said.
“The report covers data and information about processes and practices that are nearly four years old. During this time,many banks have made numerous improvements to their practices and processes concerning deceased estates,including some noted in the report,such as clearer training materials for staff that set out specific fees to refund,and assurance checks through the deceased estate process.”
Bligh also said the report conflated the incorrect charging of personal advice fees – a focus of the Royal Commission – with legitimate fees for account keeping and administration for the ongoing needs of the deceased’s estate,which are permitted under the Banking Code of Practice.
“The conflation of these points is misleading and confusing for readers,” she said.
The ABA will continue to encourage member banks to consider and build upon the report’s findings regardless of shortcomings in the report,Bligh said,as part of continuous improvements to industry practice.
The committee made nine recommendations including better training for staff to communicate with sensitivity,respect and compassion when dealing with representatives of dead customers and having a documented end-to-end quality assurance and control system for the process of managing deceased estates.
Monument said fixing the issues identified in the report would be beneficial not only for customers,but also banks. “Failing to stop fees creates additional work and can contribute to a loss of customer goodwill and harm a bank’s reputation,” she said.
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