BCCC sanctions Bank of Queensland for fees charged to deceased customers

The charged fees reached $158,834

BCCC sanctions Bank of Queensland for fees charged to deceased customers

The Banking Code Compliance Committee (BCCC) has sanctioned the Bank of Queensland (BOQ) because of its serious and systemic breaches to the Banking Code of Practice.

BOQ along with its subsidiary brands BOQ Specialist and Virgin Money Australia were found to have failed to stop or refund more than 2,500 instances where fees and interest were incorrectly charged to the estates of its deceased customers from 2019 to 2023.

The total amount that the bank had incorrectly charged reached $158,834 in fees and interest to the estates, which could possibly add to financial and emotional distress for the bereaved families and representatives.

“The decision to name BOQ reflects the severity and systemic nature of the compliance failings,” said BCCC chair Ian Govey.

“We expect banks to take swift and effective action to address non-compliance and prevent further harm to customers. BOQ’s deficiencies and inadequate response fell below our expectations.”

The breaches were compounded by BOQ’s delays in identifying and addressing the underlying issues, the BCCC said. The bank had completed an internal audit last Sept 2022 at the request of the BCCC. This had revealed that BOQ’s systems, controls, and processes for managing deceased estates had significant weaknesses.

Despite the improvements the BOQ introduced in late 2021, it has still failed to consistently apply them and address what may have caused the issues to happen in the first place, the BCCC said. Govey noted that the bank’s responses to breaches lacked a sense of urgency.

“It took far too long to implement effective measures to address the root causes and to prevent recurrence,” said Govey.

The BCCC acknowledged that the bank completed the remediation for the affected estates in phases between 2022 and 2024. It also noted that the bank had improved its internal processes in order to address the underlying issues.

“Banks must ensure their compliance frameworks are strong and appropriate for the complexity of their operations. This is vital for upholding the commitments in the Banking Code and minimising poor outcomes for customers.” said Govey.