An inquiry into the handling of deceased estates has found instances of poor practice and non-compliance with the Banking Code of Practice among the six banks in the study.
The Banking Code Compliance Committee, which is an independent body that monitors bank behaviour, says that in the inquiry it asked six banks to audit the way they managed deceased estates and conducted a survey of consumers and their representatives. The inquiry involved all four major banks and two other banks.
The Independent Chair of the BCCC Ian Govey AM, says that managing the affairs of a loved one who has passed away is difficult. “Unfortunately, our inquiry found practices that were contributing to the difficulty of managing a deceased estate.”
Govey says while there were instances of good practice, and the issues varied across the banks “…we found inadequate systems, processes and procedures were making a difficult time worse for the bereaved.”
The inquiry’s report said the poor practices and non-compliance fell into three categories:
- Fees and charges for services no longer provided – banks continuing to apply fees and charges to accounts of deceased customers despite being notified of their passing
- Failing to act within timeframes – banks failing to act on requests or instructions within the obligatory 14 days of receiving the necessary information
- Lack of respect and compassion – banks failing to treat representatives and family of deceased customers with the respect and compassion expected in the circumstances
Govey says the inquiry found instances of “…fees being charged for service no longer provided on deceased estates in all six banks we reviewed. And delays in responding to requests or acting on instructions from people managing a deceased estate were too common.”
He says as a result of these poor practices “…customers perceived a lack of respect and compassion from the bank at a time when they needed it to be understanding, flexible and responsive.”
…the BCCC has notified three banks that it will be commencing investigations into their compliance…
Following the inquiry, the BCCC has notified three banks that it will be commencing investigations into their compliance with deceased estates obligations under the Code.
It also expects the banks not subject to the inquiry to audit their practices regarding deceased estates.
Govey says all banks need to look closely at their systems and processes to identify the areas that need addressing, adding that the BCCC expects banks “…to understand their obligations under the Code and to ensure their management of deceased estates is fully compliant within 18 months.”
Significance of the Report
The BCCC’s CEO, Prue Monument, emphasised the significance of the report and its findings.
She says that several years ago now the Royal Commission “…showed that banks had a lot of work to do. It is reasonable for the community to have expected more progress and seen improvements sooner.”
Monument notes that while they have seen work from the banks on this front, with some more progressed than others “…clearly not enough has been done. Our report is a timely reminder for banks: they need to prioritise improvements in line with community expectations.”
Click here to access the full report.
