On whose authority?

The issue

A financial counsellor complained to the Committee on behalf of his client. The counsellor claimed that despite him sending the bank a third party authority form for him to act on the client’s behalf, the bank continually contacted the customer directly. The counsellor further alleged that a staff member of the bank informed him that his authority form was not acceptable, and that his client would have to complete one of the bank’s forms. The complaint alleged that the bank had breached clauses 25.2 and 29 of the Code.

Outcome

The Committee determined that the bank had breached:
1. Clause 29

• The Committee concluded that the bank was on notice that the customer was represented. Despite this, the bank continued to contact the customer to seek payment of the debt, which was a breach of Clause 29.

2. Clause 2.2

• The Committee found that the totality of the bank’s conduct was not in keeping with the Code’s general obligation to act fairly and reasonably towards the customer.

The Committee determined that the bank did not breach Clause 25.2.

Remedial Action

The Committee recommended that the bank investigate the efficiency of its system for receiving and distributing correspondence within the bank and report back to the Committee within 6 months.

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