The Banking Code Compliance Committee has released its Report on its inquiry into the management of deceased estates in compliance with Chapter 45 of the Banking Code of Practice.

Its inquiry found instances of poor practice and non-compliance with the Banking Code of Practice among the six banks in the study. The inquiry did not include data and information from all 18 banks that subscribe to the Code; it included all four major banks as well as two other banks.

The inquiry’s report said the poor practices and non-compliance fell into three categories:

• Fees and charges for services no longer provided – Banks continuing to apply fees and charges to accounts of deceased customers despite being notified of their passing.
• Failing to act within timeframes – Banks failing to act on requests or instructions within the obligatory 14 days of receiving the necessary information.
• Lack of respect and compassion – Banks failing to treat representatives and family of deceased customers with the respect and compassion expected in the circumstances.

The Report provides an analysis of compliance with Chapter 45 of the Banking Code of Practice, which contains obligations for dealing with a deceased customer’s accounts and the representatives who need to manage them. The report also contains examples from banks of good practices and performance

Underlying issues
Across the three main areas of poor practice and non-compliance, the inquiry found common underlying issues:
Systems and processes
While there were instances of systems and processes working well, the BCCC found flaws – in both automated and manual systems and processes – that contributed to poor outcomes and breaches of the Code.

Fragmentation
The Report says that fragmented systems within banks were common. The process for managing a deceased estate was often spread across multiple teams and departments, many of which followed different procedures.

Monitoring and accountability
The Report says that general monitoring and oversight of the processes for managing a deceased estate, as well as quality assurance, were inadequate in most of the banks we examined. This left a deficit in accountability that contributed to poor practices and non-compliance.

Staff training and capability
While there was considerable variation in the issues between the banks, instances of staff errors, as well as reports from consumer groups of poor service, highlighted problems with training and guidance in dealing with deceased estates in all the banks the BCCC examined.

The inquiry found a lack of formal training on Code obligations that relate to deceased estates and a heavy reliance on ‘on-the-job learning’.

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