Senate debates

Wednesday, 11 May 2011

Questions on Notice

Banking (Question No. 69)

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Hansard source

The Minister for Financial Services and Superannuation has provided the following answer to the honourable senator's question:

The Code of Banking Practice provides that all member banks must follow the ACCC guideline for Debt Collection and the Trade Practices Act (now called the Competition and Consumer Act 2010) dated June 1999. The guide has been updated and is now released by both the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC). The guidelines set out the rules regarding: what a debt collector can do with a debtor's personal information, how a debt collector can contact a debtor (including debtors with a special disadvantage) and the role of independent external dispute resolution schemes. The Commonwealth also has in place laws to prohibit the use of physical force, unconscionable conduct, undue harassment and coercion in debt collection.

Under s 912A of The Corporations Act 2001 (Corporations Act) all holders of an Australian financial services licence (AFSL), such as banks, dealing with retail clients are required to have a dispute resolution system in place. The law further requires the dispute resolution system to consist of an internal dispute resolution procedure, as well as membership of at least one external dispute resolution (EDR) scheme.

If the recovery activities relate to a bank appointing a receiver or a bank acting as a controller, the banks conduct will be governed by the Part 5.2 of the Corporations Act which regulates receivers. If a person wishes to make a complaint about a controller's conduct, they can complain to ASIC.

A person aggrieved with the actions of a Bank may be able to complain to the Financial Ombudsman Service which has the ability to resolve some disputes between a consumer and providers of financial services. In addition, aggrieved people can commence legal proceedings if there has been a breach of the law.

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