The amended and renamed Customer Owned Banking Code of Practice commenced on 1 January 2014.
The Code of Practice (formerly the Mutual Banking Code of Practice), which applies to subscribing Credit Unions, Mutual Building Societies and Mutual Banks, was amended following the completion of an independent review.
While most of the changes reflect regulatory developments and general updating, it is worth noting the incorporation of the explicit commitment to take steps to ensure that third party service providers are reputable and third party products and facilities subscribers distribute are useful, reliable and of value to their members and customers.
The amendment was specifically made to address concerns about consumer credit insurance sales practices and financial planning practices.
The obligation to provide products that “are useful, reliable and of value” is designed to put customer benefits as the primary focus of products they sell. IT is assumed that a mutual’s own products already meet that standard.
We expect that FOS and COSL would take the Code into account when they consider disputes between their subscribing members and customers.
Other changes related to:
- electronic payments
- members with special needs
- responsible lending
- credit card limit increase offers
- reverse mortgages
- electronic communications
- direct debits
- financial difficulties
- debt collection and legal action