The two most common obligations of the Banking Code of Practice, which are most frequently violated by financial institutions, are confidentiality and privacy.
The latest report from the Banking Code Compliance Committee, which covers the last six months of last year, shows that there were 20,863 code, affecting 4.4 million customers. These breaches had a financial impact of $100 million.
Other common violations involved debt collection practices, dealing with customers in financial difficulty, and complaint handling.
As stipulated by the Banking Code, institutions must submit reports to the BCCC every six months, providing a summary of their compliance with the rules.
For the 2018/19 financial year, banks reported 15,597 breaches. According to the BCCC, the large increase (to 20,863) in the last half of 2019 may mean that some banks have stopped reporting or that the areas requiring more security.
The BCCC said that many banks are not paying enough attention to the rules they must follow and also that it is concerned about the quality of data provided by banks and that it would like to see "substantial" improvement in the practices they implement to achieve this.
More than half of the violations have to do with privacy and confidentiality obligations, as well as training staff to understand the code and attract customers in a fair, reasonable and ethical manner.
The most common violations include:
- Procedures that are not followed correctly.
- Incorrect charges.
- Information provided to the wrong people.
- Errors of interest or discount and errors of recognition.
What the research essentially showed is a major and long-standing problem faced by financial institutions: "they do not show appropriate care for customers facing vulnerable conditions or do not take into account vulnerability when providing a service."
