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