Inquiry reports archive


Direct Debit Follow Up Own Motion Inquiry – an inquiry into compliance with section D20.1 of the Code to stop a direct debit arrangement linked to a member’s transaction account upon the member’s request – and to do so promptly, September 2017 (PDF, 438KB, 22 pages)

This inquiry follows two previous Committee inquiries dealing with the same Code obligation conducted in 2010 and 2012. Under section D20.1, an institution is required to stop a direct debit arrangement linked to a member’s transaction account upon the member’s request – and to do so promptly.

This inquiry developed a better understanding of how subscribing institutions have adopted the recommendations following the Committee’s 2012 inquiry and whether compliance in this area has improved.

This inquiry confirmed that, while there appears to have been some improvement, compliance with section D20.1 remains patchy and only a minority of subscribing institutions are achieving best practice standards. As a result of the findings of this inquiry, the Committee has made six recommendations for improvements to policy and procedures, customer information and compliance monitoring.

Some of the key findings include:

  • Subscribing institutions appear to have a range of procedural approaches to direct debit cancellation in place. While only a minority of institutions measure processing times for direct debit cancellation requests, all stated that these cancellations are processed promptly and typically on the same day.
  • An audit of 17 large institutions’ website information indicated that there are still problems with the written advice provided to customers online. One third of the institutions included in the audit still used wording that was either unclear or, in one case, incorrect and non-compliant. These results suggest no improvement since 2012.
  • Most institutions are lagging behind best practice with regard to the availability and accessibility of online information about direct debit cancellation. Some institutions do not provide such information and, where they do, it is rarely easily discoverable via keyword searches.
  • 52% of institutions have conducted a compliance review using the Committee’s 2012 Compliance Checklist. For most of these institutions, the review was a valuable process that highlighted compliance problems or best practice improvements to be made.

Community Engagement Own Motion Inquiry – an inquiry into Key Promise 9 of the Code which reflects the customer owned banking sector’s commitment to serving both its communities and its customers, January 2017 (PDF, 491KB, 23 pages)

This inquiry developed a better understanding of how institutions manage this obligation, the identification and promotion of good business practices for engaging with communities and the assessment of the effectiveness of institutions’ impact on the wider community. It benchmarks current industry practice and makes recommendations for good industry practice based on the data collected.

The inquiry confirmed that the customer owned banking sector is community focused, reflecting its history and the culture and frameworks that underpin its dealing with customers.

Some of the key findings include:

  1. Many institutions reported that they engage with over 100 different community groups on an annual and ongoing basis.
  2. Over 50% of institutions engage with communities on a weekly or monthly basis.
  3. 73% of institutions spent more than $20,000 on community engagement activities including 19% of the largest institutions that spent over $500,000 during the 2014-15 period.
  4. Philanthropic or voluntary community engagement, where the engagement does not provide direct benefit to the institution is wide-spread.
  5. Community engagement brings benefits to both communities and institutions – increasing community trust and cohesion.


Financial Difficulty Own Motion Inquiry – Examining Customer Owned Banking Institutions’ compliance with section 24 of the Customer Owned Banking Code of Practice: “If you are in financial difficulty”, December 2014 (PDF, 527 KB, 28 pages)

This inquiry examined whether customer owned banking institutions are meeting their obligations to help their customers in financial difficulty. We found that

  • Code Subscribers are willing to work with their customers to help them with their financial difficulties.
  • Most are meeting their training commitments and monitoring compliance with their Code obligations.
  • More than two thirds of financial counsellors agreed that on balance Code Subscribers’ financial hardship arrangements sometimes result in fair, reasonable and appropriate outcomes for their clients.

We recommended that Code Subscribers review their processes to ensure that the individual circumstances of all customers in financial difficulty are considered and that repayment arrangements are tailored to meet the individual’s situation.


Review of Mutuals’ Compliance with their Code Training Obligations (in relation to Key Promises 5 and 10, and Part E, Section 2 of the Code), September 2012, (PDF, 309 KB, 23 pages)

This inquiry examined whether customer owned banks are complying with their Code obligations to adequately train staff, agents and representatives in the Code’s requirements. We found that while most Code Subscribers have embedded Code training in their learning and development programs, the training content, method and frequency vary depending on the Code Subscriber’s size. We also found that some Code Subscribers need to improve their monitoring and supervision frameworks to ensure that their staff apply Code obligations in daily operations.

Mutual Banking Code of Practice: Stopping a Direct Debit Arrangement, June 2012, (PDF, 290 KB, 20 pages)

This inquiry examined compliance with Section 20.1 of the Code (2007 version). This section requires Code Subscribers to stop or cancel a direct debit facility linked to a member’s transaction account promptly on request by that member. Some 70% of disclosure documents we reviewed provided correct information about the cancellation process to members, in line with Code obligations. However, our shadow shopping exercise showed no change or improvement in the verbal advice provided by Code Subscribers since our previous inquiry in 2011.


Direct Debits: Shadow Shopping Exercise, a review into the operation of clause 20.1 of the Mutual Banking Code of Practice, March 2011 (PDF, 498 KB, 21 pages)

Our shadow shopping review assessed Code Subscribers’ compliance with clause 20.1 of the Code. This clause requires Code Subscribers to stop or cancel a direct debit facility linked to a customer’s transaction account promptly on request by that customer.

Seven out of ten subscribers surveyed provided incorrect or inadequate advice though their call centres on this issue. When we retested the sample four months’ later, we found a 10% improvement in practices. We made several recommendations, including that Code Subscribers:

  • Ensure appropriate information is available for staff to understand key obligations and processes required to stop a direct debit facility linked to a transaction account.
  • Increase staff awareness of the impact of incorrect advice, particularly on customers experiencing financial hardship.

Review of Part B of the Code: ‘Commitment to comply with the Code’, March 2011 (PDF, 648 KB, 25 pages)

We examined 109 Code Subscribers’ compliance with Part B of the Code, which requires them to refer to the Code in their terms and conditions for products and facilities to which the Code applies.

We reviewed how the Code was embedded in website-based documents, including terms and conditions, product disclosure statements and privacy statements. Just under a third of subscribers were fully compliant while a quarter used either the former Credit Union Code of Practice or a mixture of the current and former Code in their terms and conditions documents.

We recommended that subscribers review their websites and all terms and conditions-related documents and links to ensure the Code was incorporated in the relevant terms and conditions for products.


Visibility and Access: An examination of web-based information available to members relating to the Mutual Banking Code of Practice, internal dispute resolution and external dispute resolution, May 2010 (PDF, 2 MB, 36 pages)

We reviewed 101 Code Subscribers’ websites to assess information available to customers on the Code, internal dispute resolution (IDR) and external dispute resolution (EDR). In each of these areas, “visibility” and “accessibility” are key requirements under the Code to ensure customers can raise complaints and disputes.

Results identified good and poor practices. 43% of websites did not meet basic standards regarding visibility and accessibility. Only 23% of websites had the necessary information visible and accessible for a customer to find within a reasonable time.

We made several recommendations, including that subscribers:

  • Advertise that copies of the Code are available through branches or via mail on request.
  • Feature brief information about IDR and EDR procedures on the “home” or “contact us” page with a link to a separate complaint page.
  • Review websites against the World Wide Web Consortium’s standards.

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