Vulnerable Customers and Financial Abuse
On the 1st July 2019 the new Banking Code of Practice was introduced in Australia. It could be said that this was a result stemming from the outcome of the Royal Commission into the Banking and Financial Services Industry as it sets out stronger principles in the way that banks and the financial services sector deal with their customers. However it has also been the result of an accumulation of information gathered over the years of reports relating to financial loss and hardship incurred by customers of banks.
I’ve attached a link to the Australian Bankers Association web site for those that are interested, which outlines the changes:-
I wanted to concentrate on a particular area of the changes to the banking code centered around ‘Vulnerable Customers & Financial Abuse’, and once again within the website link under the tab ‘Policy’, there is a section referred to as ‘Vulnerable Customers’. I’ve extracted the following in relation to ‘Financial Abuse’, which impacts on ‘Vulnerable Customers’, and how it is described:-
“Financial abuse can take many forms and can happen over an extended period of time. It includes spending money without permission, forging signatures, coercing someone to sign something, pension-skimming; using the person’s bank account or credit card without their consent; denying them access to their money or bank statements. It can involve a loan that is never paid back, or threatening or pressuring someone to invest in something on their behalf, or forcing someone to provide care or other services without being paid or fairly compensated, or expects you to pay their expenses. It can also be pressure to loan money, go guarantor on a loan, bullying a person to change their will, power of attorney or other legal arrangements.“
There are currently industry guidelines which are under review by the Federal Government relating to how to best identify, respond, and protect ‘vulnerable customers’ but I thought I’d jump on the front foot to provide some insight into this. Putting something like this in practice will have its challenges and we are not sure yet, as to how far reaching through the industry this ‘Code’ will permeate. There are other changes to the code but as I said, I just wanted to isolate this particular change given the nature of it and the attempt to further protect ‘Vulnerable Customers’ that have in the past been victims of unscrupulous behaviour in their dealings, notably with banks.
COMPASS and our clients have a strong transparent bond to ensure all parties are treated equally and fairly in our dealings. It’s a real ‘partnership’ that is formed and maintained. We need to make sure that we are properly assessing our client’s needs and objectives and that we are always acting in their best interest, and where there is more than one client, that means acting in EACH of their best interests. That’s what we do!