Banks issue updated financial abuse guidelines

The Australian Banking Association (ABA) has announced the launch of the updated guidelines on financial abuse by the banking industry as part of their continued focus on responding to family violence and elder abuse.

The revised guidelines – which were last updated for family and domestic violence in 2016, and financial abuse in 2014 – are designed to recognise increases in cases of financial abuse during times of major crises such as the coronavirus pandemic, droughts, floods and bushfires, according to the ABA.

It added that the update has sought to “modernise” banks’ approach to the issue to reflect the uptake in digital banking and new risks such as the use of transaction description fields to threaten, harass and intimidate.

According to the ABA, it has worked with banks and community advocates to update and enhance existing industry guidelines, which include Preventing and responding to financial abuse (including elder financial abuse), and Preventing and responding to Family and Domestic Violence (FDV).

The ABA explained that the guidelines outline policies and practices that banks will have in place to support customers impacted by family violence and/or financial abuse. These include:

• Specialised training for staff to help them recognise the warning signs and support customers;
• Making it easier for customers to communicate with the banks in a safe and confidential manner;
• Guidance on reporting to relevant authorities;
• Referring customers for additional support; and
• Assisting customers with regaining control over their finances.

The updated guidelines of Preventing and responding to financial abuse (including elder financial abuse) responded to recommendations of the Australian Law Reform Commission report into elder abuse.

This includes an industry guideline that sets out reasonable steps in relation to, among other elements, using software and other means where possible to identify suspicious transactions, and reporting abuse to the relevant authorities when appropriate.

According to the ABA, the updates also align with the recently updated ABA Industry Guideline: Responding to requests from a power of attorney or court-appointed administrator.

The Preventing and responding to Family and Domestic Violence (FDV) guidelines include updates relating to responding to abuse in transaction descriptions, reporting obligations regarding family and domestic violence, and providing simple document request processes.

Commenting on the updated guidelines, ABA CEO Anna Bligh said financial abuse is a form of domestic violence, which acts as an “enabler” to trap women in abusive and sometimes dangerous relationships.

“It’s also used against the elderly. Elder abuse can take many forms – coercing someone to sign, forging signatures, withholding access to money,” Ms Bligh said.

“Banks take incredibly seriously their role in supporting customers experiencing financial abuse.”

Ms Bligh also said that bank staff are well trained to recognise red flags and respond to cases of financial abuse.

“These guidelines will ensure that protection of vulnerable customers remains a key priority,” Ms Bligh said.

“Anyone experiencing financial abuse should talk to their bank. They are ready to help.”

The ABA recently revived its calls for consistent powers of attorney laws across states and territories to prevent elder financial abuse.

Last year, the Commonwealth Bank of Australia (CBA) announced that customers who use transaction descriptions to engage in abusive behaviour may have their accounts suspended or discontinued after it noticed “disturbing” messages in the account of a customer experiencing domestic and family violence.

The major bank also published a new research paper in November last year, which outlined how financial institutions could provide better support for people affected by economic and financial abuse through intimate partner relationships.

Some of the suggestions set out in the paper included examining how victims and survivors of economic and financial abuse may benefit from tailored financial products, and establishing a specialist Domestic and Family Violence team to assess the potential for products and procedures to be misused by perpetrators to coercively control and abuse their partner.

[Related: ABA and publishing house tackle elder financial abuse]