Industry codes of conduct can provide additional and stronger protections for consumers. Industry codes are not laws of parliament, but are agreements entered into by members of an industry about the standards and practices they A document that sets out what a person wants to happen to their money and other property after they die. uphold. Industry codes range from unenforceable Done by your own free will. See also community treatment order (CTO). codes to compulsory codes that bind industry members. However, external dispute resolution schemes may see industry codes as good industry practice relevant to decision-making.
Banking Code of Practice
The Banking Guidelines setting out proper practice in an industry or occupation. For example, the franchising code of practice sets out rules for businesses operating under a franchise. Codes can be voluntary or statutory (required by legislation). (‘Banking Code’) is a voluntary code that sets out standards of good banking practice when banks deal with consumers who are, or may become, their individual and small business customers or guarantors. Nearly all retail banks subscribe to the Banking Code. The Banking Code is on the Australian Banking Association’s website (www.ausbanking.org.au). There is now legal authority that the Banking Code forms part of the bank’s An agreement that the law will enforce. with the customer. Therefore, a breach of the Banking Code amounts to a breach of contract Failing to do what was agreed in a contract.. Under the Banking Code, subscribing banks will:
- supply the terms and conditions of any banking services it offers to any person on request (cl 146);
- promptly process instructions to cancel a direct debit authority and complaints about an unauthorised direct debit (without directing or suggesting that the matter should be raised first with the debit user) (cls 135, 136);
- where a customer disputes a A debt that does not have to be paid until some future time. Being allowed to pay later, in the future, for something you are getting now. card transaction, claim a chargeback and not accept a refusal from the relevant bank unless it is made in accordance with the Chargeback Rules (cl 130);
- before offering, giving or increasing an existing credit facility, exercise the care and skill of a diligent and prudent banker in selecting and applying its credit assessment methods and in forming its opinion about the customer’s ability to repay (cl 49);
- try to help a customer overcome their financial difficulties with any credit facility held with the bank, including by developing a repayment plan, communicating with the customer’s financial counsellor, informing the customer about the hardship variation provisions in the NCC (if applicable) and confirming the main details of any hardship assistance it provides in writing (cls 167–178);
- not accept a person as a co-debtor under a credit facility unless the bank takes reasonable steps to ensure the borrower understands the risk of being a co-debtor, considers why the borrower wants to be a co-debtor and is satisfied there is no financial abuse (cl 54);
- give certain information to a prospective guarantor about the financial situation of the A person who owes a debt. whose loan is being guaranteed (cl 97);
- not ask a prospective guarantor to sign a A binding promise made as reassurance that another person will carry out their legal obligations (e.g. paying a debt). The person making the promise is called a guarantor. If the person being guaranteed fails to pay, the guarantor becomes responsible for the debt. unless it has allowed them three days to consider the information referred to above (unless the prospective debtor has received independent legal advice after receiving the information, or the credit relates to some business guarantees) (cls 107, 108);
- not give the guarantee A formal document, in writing or digitally authorised, which has a legal effect. For example, a transfer of land is an instrument that has the effect of changing ownership from one person to another. to the debtor or their representative to arrange the signing (cl 109);
- generally ensure the guarantee is signed in the absence of the debtor where the guarantee is signed at the bank (cl 110);
- comply with the Australian Competition and Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use. Commission and the Australian Securities and Investments Commission’s Money that is owed by one person or business to another. Collection Guideline for Collectors and Creditors (‘Debt Collection Guidelines’) (cl 180);
- only sell a debt to a debt collector who has agreed to comply with the Debt Collection Guidelines (cl 182);
- generally not assign a debt while considering a customer’s hardship request or while a customer is complying with an agreed hardship arrangement (cl 184); however, it will do so in the limited circumstances set out in clause 185.
Other similar industry codes that may assist consumers include the A restriction attached to ownership of property to secure the repayment of money borrowed. The mortgage stops the owner of the property selling it until they have paid off the debt. and Finance Association of Australia Code of Practice (whose signatories include mortgage and finance brokers and managers), the Customer Owned Banking Code (formerly the Mutual Banking Code of Practice for credit unions and mutual building societies) and the SEQUAL Code of Conduct (for providers of (1) Fairness and justice. (2) A right to property that the court will recognise even though it does not amount to full legal ownership. (3) A set of legal rules that aims to reduce any harshness that would result from strict application of the law. A document signed by parties ending a court action. The party who began the action agrees to drop it, often in exchange for a payment by the other party. Also called terms of settlement. products, such as reverse mortgages).