Mutual Banking Code Annual Report 2011-12

The Code Compliance Committee of the Mutual Banking Code of Practice has released its 2011-2012 Annual Report.

Most individual code breaches reported in 2011- 2012 related to the following five categories, representing 66% of the total number of reported breaches:

  • ‘Privacy and confidentiality’ (96 breaches or 26%);
  • ‘Key Commitments’ (42 breaches or 12%);
  • ‘Dispute resolution’ (42 breaches or 12%);
  • ‘Direct Debits’ (28 breaches or 8%);
  • ‘Training (28 breaches or 8%)
  • According to the CCC, “breaches associated with privacy and confidentiality matters appear to be associated with human, system and administration errors. They do not appear to be systemic, nor significant, in nature. …

    Some of the breaches of the Code self reported by Mutuals concerning privacy obligations include:

    • staff issuing a receipt with account details (including account balance) to a person not associated
      with the account;
    • a credit account enquiry completed for a loan when no signed consent form or evidence of verbal
      consent was noted;
    • a member was not adequately indentified when using the the call centre for an account enquiry.”

    Mutuals reported that they handled 10,401 complaints from members through their internal dispute resolution systems, 64% of which were resolved in favour of the member or by mutual agreement: 84% of these complaints were related to service provision (32%), transactions (32%), ATM failure (10%) and charges (9%).

    Mutuals received 2,137 hardship applications from members of which 1,683 or 79% were granted some assistance. Of these granted applications, 419 or 20% were resolved by the provision of long term relief.

    It’s worth comparing those statistics for mutuals with the statistics for banks in 2011-12 Annual Report of the Code Compliance Monitoring Committee of the Code of Banking Practice.

    Banks also reported significantly increased breach numbers in the areas of Privacy and Confidentiality, Debt Collection and Financial Difficulty.

    Overall, the banks reported 206,472 formal requests made for financial difficulty assistance during the reporting period of which 149,484 (69%) resulted in some type of formal assistance being granted. The CCMC has identified that some banks record only hardship applications seeking a variation to the credit contract (as defined under the National Consumer Credit Protection Act (2009) – the NCCP Act). Other banks additionally record requests for a short term suspension of payments as a request for assistance, even if the customer is not in arrears.

    Banks also reported breaches created by technology breakdowns or programming issues: the CCMC observed that “the number of significant code breaches related to technology demonstrates that issues in this area can affect large numbers of people and result in significant resources being devoted to remediate the issues”.

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