Some voluntary codes of practice that operate within the Australian financial services industry complement existing legislation by outlining how financial service providers should behave in their dealings with customers who are experiencing financial difficulty.
A recent inquiry conducted by the Customer Owned Banking Code Compliance Committee, assessed whether the practices of mutual building societies, credit unions and mutual banks are consistent with financial hardship provisions contained within the Customer Owned Banking Code of Practice.
While the Committee found the Institutions surveyed were genuinely willing to help their customers in financial difficulty, the Committee also identified some inconsistent application of the obligations under the Code. Most financial counsellors interviewed as part of the inquiry reported for example that some of the customers they represent are not being offered a tailored or flexible repayment arrangement as would be expected. A third of financial counsellors surveyed also reported instances where Institutions had listed a default on their client’s credit file or sold their debt while a request for financial hardship assistance was still being considered. This is again inconsistent with the Code’s obligations.
The Committee has made several recommendations in its inquiry report to improve industry practice and is developing a fact sheet to help consumers understand their rights under the code, to be published on its website. The Committee encourages consumers to contact it if they believe their mutual building society, credit union or mutual bank has breached the code.
A second inquiry undertaken recently examined how well insurance brokers are complying with aspects the Insurance Brokers Code of Practice.
The inquiry, conducted by the Insurance Brokers Code Compliance Committee, assessed how effectively insurance brokers were complying with their obligations under Standard 11 of the Code to make information about the Code readily available to consumers, including the services covered by the Code and how to make a complaint if things go wrong.
The Committee found that overall, code subscribers have systematically improved the visibility and accessibility of code and dispute resolution information on their websites. An increasing number of subscribers (based on a previous inquiry conducted in 2012) have – at a minimum – mentioned the code on their websites.
The Committee strongly recommends that all code subscribers promote the Code and dispute resolution information on their websites, ensuring it is highly visible and easy to understand. This will ultimately promote more professional, informed and effective relationships between insurance brokers and their clients.
A full copy of the inquiry report is available here.
FOS’s Code and Compliance Monitoring Team has released its Annual Report on aggregated general insurance industry data and consolidated analysis on code compliance for 2013–2014. The report describes:
- Data related to policies, claims, declined claims, withdrawn claims and internal disputes handled by general insurers (that subscribe to the General Insurance Code of Practice) during the reporting year.
- Industry’s views on the factors that may have influenced changes in the data since the previous reporting period.
- Instances of non-compliance with code obligations self-reported by industry and remedial actions taken.
The report also shares FOS’s Code and Compliance Monitoring Team experience of good industry practice and industry initiatives to improve standards of practice and service in 2013–14.
The report is available here.