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Released last Thursday (17 September), the Australian Banking Association’s (ABA) updated guideline consolidates separate resources on financial abuse into a single framework, building on existing provisions in the Banking Code of Practice.
Key updates include expanded support for customers experiencing vulnerability, including guidance on how financial abuse can present in First Nations communities.
The guideline also places greater emphasis on product and service design, including safety by design, staff training, and safer ways for customers to disclose abuse. They also update expectations for managing third-party authorities, such as financial counsellors, with stronger protections where there is a risk of abuse.
Small business lending has also been recognised as a potential channel for financial abuse, with banks encouraged to remain alert to warning signs and have processes in place to respond appropriately.
This can include adding someone as a company director, shareholder, partner or guarantor without their knowledge or consent; pressuring them to sign business documents they do not understand or agree to; or taking control of business assets, income, or banking access.
Other examples include leaving someone responsible for tax or other business liabilities for a company they do not control, unfairly transferring business assets, or misusing personal information such as a tax file number.
Protecting customers
The industry guideline is voluntary and does not impose binding obligations on individual banks, with the ABA noting that there may be different ways for banks to meet their obligations under the Banking Code of Practice, legislation, and regulation.
ABA CEO Simon Birmingham said the guideline aimed to ensure banks had robust safeguards in place to protect customers from financial abuse.
“Banks have spent more than a decade working to prevent financial abuse, and everyday bank staff across the country help customers stay safe and get back control of their money,” Birmingham said.
“Banks will never accept their products being used to control or coerce someone. It is despicable behaviour and the industry is working around the clock to stamp it out.
“For many people, their bank is the first place they turn when they are trying to regain control of their finances. The guideline is clear that banks should make sure a customer only has to explain their situation once and agree a safe way and time to stay in touch.
“Australian banks are taking world-leading steps to help embed financial safety by design principles in banking products, helping stop abuse before it occurs.
“If you think you may be experiencing financial abuse, reach out to your bank as soon as possible. Banks have specialist teams that can provide confidential support and help you understand your options.”
[Related: Banking associations back ATO data sharing after AUSTRAC fraud probe]
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