Major bank sanctioned by BCCC

The Banking Code Compliance Committee (BCCC) has sanctioned Westpac Bank for breaching the Banking Code of Practice (the Banking Code).

The BCCC has alleged that Westpac did not provide adequate support to its customers in Tennant Creek, Northern Territory following its branch closure in the area.

An investigation by the committee revealed that the major bank failed to comply with its obligations under the Banking Code and the Australian Banking Association’s (ABA) Branch Closure Protocol when the Tennant Creek branch closed its doors in September 2022.

It was found that Westpac needed to provide further support to customers in order to transition into other ways of banking and engage with the community to promptly address concerns.

It was also alleged the major bank needed to do more to provide adequate assistance to customers in remote areas to ensure they could access essential banking services.

Ian Govey AM, chair of the BCCC, said: “The obligations set out in the Code are crucial for protecting customers when a bank branch closes.

“In this case, Westpac has fallen short of their promise to customers. Their actions have had a significant and detrimental impact on many people within the Tennant Creek community.”

According to the BCCC, there was an influx of requests for help to local community groups after many customers struggled to adapt to the branch closure.

Furthermore, the major bank’s response to community group concerns was “deemed insufficient”, which in turn created further challenges for vulnerable customers.

Govey said: “Westpac’s failure to respond promptly to community concerns and provide adequate support was troubling and appears to have disproportionately impacted on vulnerable customers.”

Westpac’s sanction is the most severe action the BCCC can take in response to the Banking Code breaches, with the decision being proportionate to the “gravity of Westpac’s failures and the need for banks to comply with the Code’s requirements when closing branches, particularly in remote areas”.

“This decision sends a clear message to the banking industry that non-compliance with the Code’s standards will not be tolerated,” Govey said.

“Banks must carefully consider the needs of its customers and provide the right support to adapt to new ways of banking.”

Late last year, the BCCC flagged concerns over code breaches, despite a decrease of 9 per cent overall in the number of breaches by Australian banks.

[RELATED: BCCC flags concerns over Code breaches]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

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