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Has the Australian Banking Industry finally grown a Heart? After decades of putting profits before people, Australian banks are taking more responsibility for helping the poor and the most vulnerable members of our society. The banking industry’s latest initiative is a package to help prevent financial abuse of the elderly and other vulnerable people.
Last week we told you about NAB’s Microfinance Program, which provides low cost credit to pensioners, students, migrants, struggling small business owners and others who are on a low-income. Also last week, CEO of the Australian Bankers’ Association, Steven Münchenberg, told us about the banking industry’s financial hardship package designed to help bank customers who are experiencing temporary financial difficulties.
The latest announcement by the Australian Bankers’ Association (ABA) is a package of initiatives to be adopted by the banking industry to help prevent financial abuse of the elderly.
There is little reliable data on financial abuse in Australia because it is under reported. However, according to a report published by the Standing Committee on Legal and Constitutional Affairs¹ following its inquiry into older people and the law, financial abuse is the fastest growing form of abuse experience by the elderly².
Research by Monash University shows that widowed women over the age of 75 are most vulnerable to financial abuse³. Most often the perpetrator of financial abuse is a close family member, usually a son or daughter, who is trying to gain control of a parent’s income.
New banking industry guidelines announced on Friday by the ABA, will do more to educate bank staff about how to identify and manage suspected cases of financial abuse. The package also includes consumer fact sheets to educate bank customers about financial abuse and how to better protect themselves from it.
The consumer fact sheet Protecting yourself from financial abuse, provides information about financial abuse and outlines the steps customers can take to better protect themselves, their money and their property.
Steven Münchenberg, Chief Executive of the ABA said: “The banking industry has developed this package after discussions with community and consumer groups identified that more needed to be done to ensure bank staff and customers were aware of the risks of financial abuse.”
“Financial abuse can happen to anyone, but some people may be at greater risk, including older Australians, people with a disability, people experiencing mental illness or emotional challenges, and people who are socially isolated.”
The ABA has acknowledged that financial abuse of vulnerable people was a challenging area for banks.
“To intervene or question a customer inappropriately, or without due consideration and sensitivity, may cause embarrassment for the customer, or possibly damage the customer-banker relationship, or even result in greater vulnerability for the customer. Consequently, in cases of suspected financial abuse, it’s important to be both vigilant and cautious,” said Mr Münchenberg.
“If customers think their finances are being abused, the ABA advises that they talk to someone they trust such as a doctor, lawyer, accountant or religious advisor. We also suggest that you talk to your bank.”
“Alternatively, customers may want to have a third party help them manage their money. In this instance, a power of attorney might be a good option for them – but, it’s important these formal arrangements are put in place correctly and that customers select an attorney that’s right for them because unfortunately they can be misused.”
The consumer fact sheet Setting up power of attorney to help manage your banking needs, covers what customers need to know in order to set up power of attorney arrangements to manage their banking needs and what they can expect from banks.
Bank customers can obtain consumers fact sheets from their local bank.
References:
1 On 17 September 2011, the Standing Committee of Attorneys-General transitioned to the Standing Council on Law and Justice (SCLJ). SCLJ comprises the Attorneys-General of the Commonwealth and States and Territories, the Western Australian Minister for Corrective Services and the Minister of Justice of New Zealand.
2 National Seniors, Submission No. 67. http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=laca/olderpeople/subs.htm
3. ABC News website, 15 September 2011. Financial abuse of elderly Australians spikes accessed on 17 June 2013.
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