The Code of Banking Practice (the Code) gives consumers the right to request that their bank cancel a direct debit.
The Banking Code Compliance Monitoring Committee (CCMC) recently released a report on its research on compliance with the Code’s direct debit requirements, including mystery shopping and a review of banks’ websites.
The results show that noncompliance is unacceptably high. In just over half (54%) of the CCMC’s mystery shopping contacts, bank staff gave non-compliant responses to a customer enquiry. contact centre staff remain more likely to offer compliant information than their counterparts in branches.
Consumers who turn to bank websites to seek information on direct debit cancellation are also unlikely to find it. The CCMC’s review of bank websites found that where such information is provided, it is typically offered only within product Terms and Conditions. Only a few banks provided simple guidance that is easy to locate.
The Committee made 7 recommendations:
Recommendation 1: Add clear, simple customer guidance on direct debit cancellation to websites. This guidance should be easy to find on FAQ pages or using basic search terms, and explain the difference between direct debits which have been set up using a BSB and Account Number, and recurring card payments set up via a Credit or Debit Card.
Recommendation 2: Explore and implement ways to allow customers to cancel direct debits through their existing online banking services.
Recommendation 3: Ensure that all frontline staff are aware of the direct debit Code obligations by providing Code-related and operational training programs to both new and existing staff providing easily-accessible quick reference guides and cancellation forms; sharing the CCMC’s reports and findings; and updating and reminding staff through newsletters, emails, intranet news items or team meetings. Staff should be reminded of the bank’s obligations at least once a year.
Recommendation 4: Via training, increase staff awareness of the impact of providing incorrect information, especially for customers in financial difficulty.
Recommendation 5: Conduct internal mystery shopping annually, reporting the outcomes to the CCMC.
Recommendation 6: Remind monitoring and quality assurance staff of the Code obligations to ensure that they can identify non-compliance. Any non-compliance identified should be raised with the staff concerned and reported to the CCMC.
Recommendation 7: With the Australian Bankers Association’s support, continue to work with card schemes to develop functionality that allows customers to cancel recurring card payments via their bank, free of charge.
