Banks have vowed to make it easier for customers to cancel their credit cards, they will stop charging statement fees, and borrowers will be alerted when their interest-free period is about to end, as part of a new code of conduct.
The Australian Bankers’ Association will on Wednesday unveil a swag of changes intended to put a greater focus on ethical behaviour in an industry that has copped a backlash from government.
Changes in the code include a commitment to allow customers to close a credit card online, rather than needing to do so in a branch or over the phone.
Banks also say they will waive or refund “statement fees” for customers without access to electronic statements, and remind customers when a credit card’s interest-free period is about to end.
With more parents acting as guarantors to help their children enter the housing market, the code also includes changes targeted at people guaranteeing the loans of others.
It says guarantors who have not received legal advice must have a three-day waiting period before signing up. Guarantors will also be informed if the borrower is struggling financially, it says.
Banks decided to revamp the code last year as political pressure on the industry started to mount following a series of scandals.
“Banks are committed to change and the new code is stronger, broader and written in simple to understand language,” ABA chief executive Anna Bligh said.
“It has been completely rewritten to better meet community expectations and service the needs of customers.”
The code includes an already-announced commitment by banks to no longer have tellers selling “add-on insurance” with credit cards, which is intended to cover consumers if they get sick or lose their job. The corporate regulator has said such insurance is problematic, and many customers end up being ineligible when they attempt to make a claim.
In a sign of the finance sector’s problems with add-on insurance, it was announced on Tuesday that Swann Insurance had refunded $39 million in premiums to 67,960 customers. The refunds covered six types of add-on insurance sold by Swann, owned by Insurance Australia Group.
Separately, the federal government has this year cracked down on the banks’ credit card businesses, including new restrictions on how banks can determine customers’ credit limits. Banks are also being banned from making unsolicited credit card offers to customers.
This story Administrator ready to work first appeared on Nanjing Night Net.