Puzzle Finance Blog

Banks to boost help for those in debt under newly updated Code of Banking Practice

BANK customers with spiralling debts will have stronger bargaining power with their financial institution under a new code of banking practice that will come into force next year.

The legally binding code will force the banks to be more proactive in identifying customers in financial trouble and then working with them to find a solution.

Around 15,000 disputes were lodged with the Financial Ombudsman last year involving the banking sector - as more and more families found it harder to balance their budgets in a slowing economy.

The Australian Securities & Investments Commission already requires lenders to give borrowers 30 days to make payments after being served with a default notice, and to inform them about their rights and options to apply for relief on the grounds of financial hardship.But the new code will improve the powers of the independent chair of the Code Compliance Monitoring Committee to intervene in disputes between customers and banks.

Banks will also be obliged to send customers with a mortgage on their home or investment property an annual reminder about their insurance obligations. A recent survey showed only 25 per cent of bank customers were aware there are programs available to help households in financial hardship.

Australian Bankers Association chief executive Steven Munchenberg said the earlier people contact their bank about financial trouble the better.

"This code is part of a drive we have been on for some time to show that banks will help in bad times and are not just fair weather friends," he said.

The new code was supported by consumers groups as a positive move but more still needs to be done.

The peak body for financial counsellors Financial Counselling Australia executive director Fiona Guthrie wants to see the banks offer Centrelink customers no fee accounts.

"Many people are still not accessing the right accounts," she said.

"Access to a bank account is fundamental for participation in Australian society."

The updated Code of Banking Practice is to come into effect on February 1 next year

Posted by Stephen McMahon - News Limited Network on 1st February, 2013 | Comments | Trackbacks

Bookmark and Share

The trackback URL for this page is http://www.puzzlefinance.com.au/trackback?post=26635119


There are no trackbacks for this post


There are no comments for this post

Post a Comment

HTML is not allowed in comments, http://... will be automatically linked.

Name (required):

Email Address (not displayed):

Comment (required):

To help prevent spam, please enter the word cape here:

Puzzle Finance Blog

About Puzzle Finance


September 2017
August 2017
July 2017
June 2017
May 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010


Purchase or Rent (1)
The Age (1)