Lacking respect: Report censures banks for charging fees on deceased accounts

Other damning findings include banks failing to respond to families and to act on accounts within the obligatory 14 day period, poor staff training and inadequate systems, processes and procedures which made a difficult time worse for the bereaved.

The report, More work to do: A report on the management of deceased estates, described the banks' failures as "disappointing and unacceptable" given the time banks have had to address issues raised by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which highlighted fees for no service misconduct in the context of failure to provide personal financial advice.

"Had banks made greater efforts to improve systems and processes in recent years, many of these issues could have been avoided," the report said.

The BCCC held an inquiry into the practices of six unnamed banks in managing the estates of deceased customers to analyse their compliance with Chapter 45 of the Banking Code of Practice which contains obligations for dealing with a deceased customer's accounts and the representatives who need to manage them.

These banks responded to two BCCC information requests in November 2021 and June 2022 and undertook audits of their compliance with Chapter 45 obligations.

The inquiry found widespread poor practices and non-compliance with obligations in the Code, which contributed to the difficulty faced by bereaved family members when attempting to manage a deceased estate.

Most banks subject to the inquiry were charging fees for services no longer provided on deceased estates, and delays in responding to requests or acting on instructions from people managing a deceased estate were common.

As a result of these poor practices, many customers perceived a lack of respect and compassion from the bank at a time when they needed it to be understanding, flexible and responsive.

Failing to identify, stop, and then refund fees created unnecessary financial burdens and administrative difficulties for representatives of deceased customers, at times exacerbating the emotional distress of family members, said the report.

"Several years ago now the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry showed that banks had a lot of work to do. It is reasonable for the community to have expected more progress and seen improvements sooner," said BCCC chief executive Prue Monument.

"While we have seen work from the banks on this front, with some more progressed than others, clearly not enough has been done. Our report is a timely reminder for banks: they need to prioritise improvements in line with community expectations."

Ms Monument expressed the BCCC's expectation that this report will lead to better outcomes both for people handling the estates of loved ones and for banks.

"Fixing the issues we identified will improve processes for consumers and help relieve the stress of managing the estate of a loved one. But doing so will also be good for banks," she said. "Failing to stop fees, for example, creates additional work and can contribute to a loss of customer goodwill and harm a bank's reputation."

The report includes a case study which outlines the three month-long battle a man had with the bank of his late brother.

Despite providing the original death certificate as well as an Australian Capital Territory Supreme Court application for letters of administration, he received no contact from the bank for two months.

The man provided the original grant of letters of administration from the ACT Supreme Court to a branch in Canberra and asked for an update on his brother's estate. It was then that he was told he had to open an estate account to access his brother's funds but found out the branch in Canberra had not referred the notification of his brother's death or the documentation he submitted to the deceased estates team.

In the following month the man was required to speak to several different bank employees and was given conflicting information and advice from the bank's branch and the deceased estates team. Documentation was not forwarded to appropriate departments and he was asked to complete and sign the same paperwork more than once.