The Banking Code Compliance Committee has published its report on subscribing banks’ compliance with the Code for the period July to December 2019.

Banks self-report their compliance with the Code every six months.

The most common category of breaches, accounting for 53% of reported breaches overall involved a breach of Part 2 of the Code which includes obligations to ‘protect a customer’s privacy and confidentiality, to train staff to understand the Code and to engage with customers in a fair, reasonable and ethical manner’.

Part 2 breaches also include charging incorrect fees; providing data to the wrong party; delays in directing complaints to the appropriate complaints handling team; keeping inaccurate or incomplete file notes; and interest or discount errors.

Privacy incidents included a bank’s internal policy about redacting credit card numbers and when information was provided or disclosed to an  incorrect party.

Staff training incidents included:
▪ Processes not followed correctly
▪ Fees incorrectly charged
▪ Information provided or disclosed to an incorrect party
▪ Delays in directing complaints to the appropriate complaints handling team
▪ Incorrect correspondence provided to a customer
▪ Incomplete or inaccurate file notes
▪ Interest or discount errors
▪ Terms and conditions containing incorrect or missing information
▪ Identification errors
▪ Not complying with Terms and Conditions.

Banks reported that the majority of incidents (60%) were caused by human error alone, 13% involved a control, training, or resourcing failure (including process deficiencies) and 13% involved a system error. Banks reported that 8% of incidents were caused by human error along with another cause.

30% of incidents were self-identified by staff members. The other most prominent methods of breach identification were via a customer complaint, query, or feedback (27%), and line 1 quality assurance activities including call monitoring (23%). A further 9% of incidents were identified by line 2 or internal reviews.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.