ME Bank has been called out by the Banking Code Compliance Committee over the way it handled adjustments to its redraw accounts.
The BCCC has issued a notice of sanction, citing ME’s poor and ineffective communication, and detriment to customers.
The bank made adjustments to the terms of redraws on some legacy home loan accounts last year but only notified impacted customers after the adjustments were made.
The bank did not communicate the changes at all to customers who did not use internet banking or were not active users of their redraw facility.
After being widely criticised over its actions, ME restored the earlier redraw terms for any customer who requested it.
The BCCC found that ME breached two clauses of the Banking Code of Practice – one relating to timely and clear communication and the other relating to reasonable conduct. Its breach of one clause was systemic and its breach of the other was systemic and serious.
ME is implementing a management action plan, after reviewing the incident.
BCCC chair Ian Govey said efficient and effective communication with customers is a paramount requirement of the code.
“ME’s failure to rectify long-standing system issues was a contributing factor to its poor conduct at the time it made the adjustments to customers’ redraw accounts,” he said.