Accomplish 27 – June 2016

“We support credit unions, mutual banks and mutual building societies to achieve service standards Australians can trust.”

In this issue:

News from the Committee

Annual Work Plan 2016-17

Stakeholder engagement

COBA Compliance Forum

Chair’s attendance of the Financial Counsellors Association (FCA) Conference

Own motion Inquiry ‘Community Engagement’

Completing the 2016 Annual Compliance Statement

Non-compliance reporting

Dispute Reporting

Check out our revised website

Diary dates

Contact Us

 

News from the Committee

Annual Work Plan 2016-17

The Committee is pleased that the Customer Owned Banking Association (COBA) has approved our Annual Work Plan and Budget for 2016-17. Our priorities include:

  • The 2016 Annual Compliance Statement (ACS) program for all Code subscribers to be completed via the improved online portal.
  • The compliance verification program – identifying potential areas of non-compliance from an analysis of the ACS data. We anticipate about 10% of Code subscribers will take part in a desk top audit or phone conference to verify their ability to comply with Code obligations.
  • One own motion inquiry to assess compliance with a specific area of Code obligation in more detail (possible areas for assessment include Code as a positive marketing tool and advertising standards).
  • Continued communication with stakeholders about Code compliance issues through Accomplish and the Annual Report.
  • To assist and provide advice to COBA where appropriate about training and other compliance activities to ensure effective compliance by Code Subscribers with Code obligations.
  • To review and enhance guidelines to assist stakeholders to understand the Committee’s operations set out in the Charter.
  • To provide advice to COBA where appropriate on the currency and the applicability of the Code.
  • To conduct an awareness program of the operations of the Committee under its Charter with consumer advocates and other relevant industry bodies.
  • To conduct an awareness program of positive breach and complaints monitoring and reporting for Code subscribers.

Stakeholder engagement

Over the past few months the Committee has engaged with various industry stakeholders to increase awareness of the work of the Code Compliance Committee and to discuss common interests relating to customer owned banks. Among those stakeholders we have met with Mutuals Audit & Governance Professionals Institute (MAGPI), Women in Mutuals and Small Australian Mutuals Network (SAM).The Compliance Manager meets regularly with the CEO of COBA while the Committee Chair meets as required with the Chair of the Board of COBA.

At its recent meeting, the Committee also met with its equivalent compliance monitoring body in the banking sector – the Code Compliance Monitoring Committee (CCMC) to discuss common issues and share knowledge and compliance monitoring experiences.

As part of that meeting, the Committee also met with ASIC to discuss ASIC’s current issues in the financial services sector.

ASIC supports the Committee’s work to embed good compliance culture in organisations’ activities.

COBA Compliance Forum

The General Manager, Sally Davis, took part in COBA’s Compliance Forums in Sydney, Brisbane, Adelaide and Melbourne and presented on Code issues, in particular highlighting the differences between Code compliance monitoring activities and external dispute resolution investigation matters. Sally also provided examples for positive breach and complaints recording, monitoring and reporting. A copy of her presentation slides can be downloaded here.

Chair’s attendance of the Financial Counsellors Association (FCA) Conference

FCA is the peak body for not for profit financial counsellors in Australia.

The conference provided the Chair with a customer perspective of the work of customer owned banking institutions and highlighted current and forthcoming issues regarding financial difficulty.

FCA urges financial service providers to collaborate closely with not for profit financial counsellors to provide feasible solutions for its customers. In particular, the conference raised issues regarding family and domestic violence, mental health and disadvantaged and vulnerable consumers. It also discussed the review of the Australian Consumer Law, a new code for debt collectors and a hardship register.

 

Own motion Inquiry ‘Community Engagement’

During May 2016 we undertook an Own Motion Inquiry (OMI) to examine Customer Owned Banking institutions’ (institutions’) compliance with their obligations under Part C Key Promise 9 of the Customer Owned Banking Code of Practice to effectively engage with the wider community:

We will recognise our impact on the wider community

The customer owned banking sector has a strong community focus. We will take account of the impact of our operations on staff, the communities we serve and our customers. We will promote community engagement and will contribute to community activities and projects.

Please give this matter your urgent attention if your response to our OMI is still outstanding. It was due 31 May. We have already received most of the responses and the full outcome of the inquiry will be published in September.

We are always on the lookout for interesting areas for a review.

Contact us with any ideas or comments on the following topics and issues:

  • how to use Code as a positive marketing tool
  • compliance with advertising standards
  • management of garnishee orders.

Your input is important to our future Code compliance monitoring work.

 

Completing the 2016 Annual Compliance Statement

The 2016 Annual Compliance Statement (ACS) will soon open for completion via your individual online portal, and is due by 31 August 2016.

While the 2016 ACS is similar to previous years, we have listened to you and incorporated some of the improvements you suggested.

The ACS asks for information about:

  • your Code compliance frameworks and breach and complaints reporting and monitoring
  • good industry practice and an overall culture of embracing Code obligations.

Before you begin

  • review your internal policy and procedures relating to Code compliance
  • assess and verify your staff awareness of Code obligations
  • review your staff training with Code obligations
  • review your Code compliance reporting and monitoring process
  • assess and verify your Code compliance data
  • review your internal complaints and disputes reporting and monitoring process
  • assess and verify your internal complaints and disputes data.

When completing the ACS

  • record data for the reporting period 1 July 2015 to 30 June 2016
  • provide enough information to address each question in full
  • highlight any changes to frameworks, processes or procedures in the period
  • ensure that the data you provide is accurate and complete
  • upload any necessary supporting documents
  • click on the links within the ACS to access more detailed instructions, and please call us if you have any questions
  • please ensure that all the data is correct and adds up

After you submit

  • After submission you will receive an acknowledgement email.
  • If we need more information to assess your compliance with the Code, we may contact you to ask for more information or clarification or to arrange an on-site visit or desktop audit.

 

Non-compliance reporting

The first section of the Annual Compliance Statement (ACS) deals with Code non-compliance, asking you to record breaches and significant breaches of each Code clause in a table.

A breach of the Code is defined as a failure to comply with the obligations of the Code in relation to the provision of a customer owned banking service.

Sourcing breach data

Code Subscribers typically source breach data from consolidated compliance registers. Where these do not cover all Code breaches, review other sources such as complaints records for breach incidents.

Breaches can arise across all operational areas, in direct dealings with customers (such as branches, collections and call centres), and in other areas such as marketing and systems.

Your identification of Code breaches should include how positive Code breach monitoring and reporting is embedded in your overall compliance framework and company’s culture.

Identifying significant breaches

Significant breaches are recorded in a separate column of the table. Whether a breach is ‘significant’ is determined on a case-by-case basis, with reference to:

  • the number of customers impacted
  • customers’ actual and potential financial loss
  • the extent of remedial actions required
  • the impact of the breach on the Institution’s ability to provide services
  • the extent to which the breach indicates the Institution’s Code compliance arrangements are inadequate.

Examples of a significant breach might include:

  • incorrect disclosures in a PDS
  • inaccurate advertising of product details
  • procedures (such as Debt Collection Guidelines and Centrelink Guidelines) that do not comply with the Code
  • multiple errors affecting a class or classes of customers (such as charging incorrect interest rates or failing to act on direct debits cancellation instructions)
  • multiple failures to follow Code requirements affecting a class or classes of customers, such as customers in financial difficulty
  • failure to follow the guarantee provision in relation to non-unlimited liability resulting in large customer detriment (Code section D12).

You should have systems and procedures to identify and report significant breaches of your obligations with regards to corporate law. In identifying significant Code breaches you may apply the same criteria you use to determine breach significance (or similar) for internal or regulatory reporting.

Recording incidents that involve multiple breaches

Where a single incident results in breaches of the same type, count this as a single breach of the relevant Code clause, e.g. a systems error results in multiple breaches, but there is no impact on customers.

Where a single incident results in breaches of more than one Code clause, record the breach only against the primary reason for non-compliance, e.g. a customer’s privacy is breached and their complaint is not dealt with in accordance with internal dispute resolution timeframes.

Recording breaches reported to regulators

Include in your ACS any regulatory breaches reported to ASIC or another regulator that are also breaches (or significant breaches) of the Code.

 

Dispute Reporting

The second section of the Annual Compliance Statement (ACS) deals with complaints/disputes received during the reporting period.

Complaint is an expression of dissatisfaction regarding a customer owned banking service where a response is explicitly or implicitly expected and has not been resolved to the customers satisfaction within five business days. The exception is hardship cases – all complaints relating to hardship cases are to be reported regardless if they have been resolved within five business days or not.

Dispute is a complaint by an individual or small business in relation to a customer owned banking service that has not been previously resolved when the complaint is brought to the customer owned banking institution’s attention.

We also provide detailed information how we classify complaint products, issues and outcomes.

 

Check out our revised website – www.cobccc.org.au

We now have specific information for consumers and Code Subscribers.

Consumer information include information about their rights under the Code, including if you are in financial difficulty and information for small business and how to report a concern.

Meg’s story provide a good case study.

Check out how to comply with the Code regarding financial difficulty obligations, advertising standards and direct debit arrangements.

Consider providing the fact sheets in the news and publications section to your staff for training purpose.

 

Diary dates

Conferences

7-8 September 2016 – 2016 FOS Australia National Conference in Melbourne – ‘Beyond the promise – a new resolve’

24-27 September 2016 – 2016 Customer Owned Banking Conference in Adelaide – ‘Lead, change and grow’

Committee meetings

5 October 2016, Committee meets in Melbourne

29 November 2016, Committee meets in Melboourne

15 February 2017, Committee meets in Sydney

 

Contact Us

PO Box 14240, Melbourne Vic 8001

Phone: 1800 367 287

Email: info@codecompliance.org.au

 

 

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