Banking practice code praised by ombudsman

By NZPA

Tuesday 3rd December 2002

A new banking practice code launched this week has been applauded by banking ombudsman Liz Brown.

Prepared by member banks of the Bankers Association, the new code replaces the 1996 code and the 1999 statement of principles.

"Overall, the fundamentals of the new code are right and I'm especially pleased to see special acknowledgment of the needs of the elderly and disabled included in the new edition," Mrs Brown said

She said material added to the new code included information on how banks deal with direct debits, automatic payments, computer and phone banking, and fund transfers.

"Many of the provisions remain the same, but the changes were necessary and I applaud them."

A change of the time between code reviews from five years to three years was "good news".

"Given the pace of change of the technology involved, five years is simply too long a period between reviews," she said. "For example, the 1996 code only made one reference each to telephone and computer banking and with the increasing rate of uptake of those services, that meant a lot of work updating the review."

Despite being pleased with the code, Mrs Brown said there were "one or two things I'd like to see."

"Banks still reserve the right to notify changes though public notices and posters in branch offices," Mrs Brown said. "I'd like to see banks notify changes in writing to individual customers and have that process acknowledged in the code of practice.

"And I'd like to see a clear distinction made between marketing information and material sent to customers on changes to terms and conditions, as the current system leads to confusion."

Mrs Brown said the new code "tells you what the law says in a way you can understand without spending a day of research in a law library."

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