Australian banks have made commitments to help their business and retail customers deal with the impact of COVID, but in a significant number of cases they have mucked it up.

The Banking Code Compliance Committee’s latest review of the industry’s compliance with the Banking Code of Practice found that in the period between June and December last year there were 230 breaches related to the pandemic that affected more than 200,000 customers.

The BCCC said breaches included banks failing to send required notifications to customers, sending notifications late and making processing errors related to assistance packages.

Customers were placed on assistance packages without being asked, while others were declined for assistance because of system errors.

There were missed opportunities to assist customers because checks were not performed. Collection activity and default listings were applied to customers on COVID assistance.

The BCCC said banks attributed these incidents to the large number of requests and to errors in implementing system changes quickly that involved large numbers of customers and product types.

While the BCCC accepted this situation, saying it expects the banks’ COVID response processes to “mature”, it reiterated a theme common to its recent reports that banks need to do more to prevent breaches.

It has also criticised banks for falling back on “human error” as a default cause of compliance breaches, without establishing or acting on the root causes of the problems.

Overall, banks reported 22,473 breaches during the December half last year, an increase of 13 per cent over the previous six months.

“The BCCC is concerned that so many breaches of the code are occurring. Banks need to increase their focus on preventing breaches. We are aware of some positive indications that banks are taking action in this regard,” the report said.

The biggest increase in breaches related to the section of the code dealing with “opening an account and using banking services”. Breaches generally involved banks providing incorrect or misleading information or advice, incorrect fee charges and interest rates.

A number of these breaches occurred when term and conditions or special offers were unclear, and staff gave incorrect advice in response to queries.

There was also a big increase in breaches related to the section of the code dealing with “managing your account”. Direct debits and recurring payments caused the highest number of breaches, such as banks not following customer instructions.