Thursday, August 30, 2018 - Posted by Michael McCulloch
In our April 2018 edition of Debt Collection News we reported that the ABA announced a new Banking Code of Practice which was subject to approval by ASIC.
ASIC has now signed off on the new Banking Code of Practice following an independent review and extensive consultation with the ABA.
The new Code provides for increased protections for small business borrowers and expands the reach and impact of legal protections against unfair contract terms. Expanded protections for consumers included:
- provisions for inclusive and accessible banking;
- protections relating to the sale of Consumer Credit Insurance (CCI) included a deferred sales period of 4 days for CCI for credit cards and personal loans sold in branches and over the phone;
- protections for Guarantors giving them generally 3 days to consider information about any guarantee they provide and requiring banks to only enforce a guarantee once action has been taken against the borrower;
- rules regarding credit card customers to receive reminders about balance transfer promotional periods ending as well as more consistent treatment about how repayments are applied; and
- enhanced processes for assisting customers in financial difficulty and processes for resolving complaints.
All ABA member banks will be required to subscribe to the Code as a condition of their ABA membership and the relevant protections in the Code will form of the banks' contractual relationship with their banking customers.
The Code will commence operation from July 2019.
Source: Money | Management - July 2018