Banks found to be charging fees to deceased estates

Six Australian banks, including the big four, have been found wanting when it comes to handling deceased estates, with an inquiry finding they continued to charge customers’ accounts even after being notified of their death.

In a report released on Friday, the Banking Code Compliance Committee (BCCC) said its review had found all six banks in its inquiry had charged fees for services no longer provided on deceased estates.

The compliance committee monitors banks to ensure they are following the Banking Code of Practice. The independent body’s chair, Ian Govey, said there were also other issues, including banks failing to act within the obligatory 14 days of receiving the necessary information, a lack of respect and compassion towards representatives and family of deceased customers.

“While there were instances of good practice, and the issues varied across the banks, we found inadequate systems, processes and procedures were making a difficult time worse for the bereaved,” he said.

After the inquiry, the Banking Code Compliance Committee notified three banks that it would start investigations into their compliance with deceased estates obligations under the code of practice. It also said banks not subject to its inquiry were expected to audit their practices regarding deceased estates.

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“We expect banks to understand their obligations and to ensure their management of deceased estates is fully compliant within 18 months,” Govey said.

The compliance committee chief Prue Monument said while some banks had progressed more than others following the royal commission four years ago, “clearly not enough has been done”.

“Several years ago now, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry showed that banks had a lot of work to do,” Monument said. “It is reasonable for the community to have expected more progress and seen improvements sooner.”