Bendigo Bank ‘named and shamed’ for
systemic mistreatment of Great Southern borrowers
The Banking Code Compliance Committee (BCCC) has
sanctioned the Bendigo and Adelaide Bank by naming it in its
2019-2020 Annual Report for systemic breaches of the Banking
Code of Conduct (2013 version). It was the only bank named.
The BCCC is an independent committee set up by and funded
by the Australian Banks. It describes its work as:
“we run a monitoring program that helps banks strengthen
their compliance frameworks to better identify, report and
remedy breaches of the Banking Code of Practice. We also
share our Code compliance knowledge and guide banks on good
In its 2019-2020 Annual Report issued on 30 September
2020, the BCCC devotes a special section to report on its
investigation into the Bendigo and Adelaide Bank, which is
reproduced in full as follows:
Bendigo and Adelaide Bank
sanctioned for serious and systemic Code breaches
In March 2017, the Code of Conduct Monitoring Committee (CCMC)
commenced an investigation into Bendigo and Adelaide Bank.
The investigation focussed, in particular, on its Great
Southern Loans (GSL) business unit’s compliance with the
2013 Code of Banking Practice (2013 Code). As part of this
investigation, Bendigo and Adelaide Bank was required by the
BCCC to engage an external and independent party to conduct
an investigatory Audit into the GSL business unit’s
compliance with the 2013 Code from February 2015 to February
The Audit found that the GSL business unit was largely
segregated from the bank’s broader operations and it had
inadequate systems, processes and resources to cope with a
large influx of collections activity in 2015. The BCCC
concluded that the bank’s lack of oversight led to a failure
to build a strong compliance structure and framework that
could robustly identify, investigate, record and report
instances of non-compliance with the 2013 Code within GSL.
The BCCC has now issued a Finding which concluded that
Bendigo and Adelaide Bank breached the following provisions
of the 2013 Code:
- Clause 32.1 (debt collection)
- Clause 28.2 (financial difficulty)
- Clause 37 (complaints handling)
- Clause 24 (privacy and confidentiality)
- Clause 9 (training and competency)
- Clause 36(g) (complying with CCMC/ BCCC requests)
- Clause 3.2 (acting fairly and reasonably).
The BCCC found that the bank’s breaches of all
obligations listed above were systemic (with the exception
of clause 36(g)) and serious.
Taking into account the seriousness of the breaches and
their likely impact on GSL customers, the BCCC imposes a
sanction to name Bendigo and Adelaide Bank in this Annual
Report and on our website for breaches of the 2013 Code.
The BCCC acknowledges the work Bendigo and Adelaide Bank
has undertaken since the completion of the Audit to address
the shortfalls and root causes identified to ensure its
ongoing compliance with the Code. We also note the bank’s
ongoing efforts to remediate any applicable GSL customers
who were adversely impacted by Bendigo and Adelaide Bank’s
non-compliance with the 2013 Code.
The Adelaide and Bendigo
The Bendigo and Adelaide Bank responded on 30 September
2020 with a Statement on BCCC Findings. These are some
Bendigo and Adelaide Bank has taken swift and
decisive action to remedy historical breaches of the
Code of Banking Practice 2013 (Code) reported today by
the Banking Code Compliance Committee (BCCC) regarding
some customers within the Great Southern loan portfolio.
The historical breaches relate to debt collection
processes, with 81 percent of the issues identified
relating to the 2015 and 2016 calendar years.
Managing Director, Marnie Baker said: “We regret our
actions and sincerely apologise for any negative impacts
these breaches have cause for our customers.”
A provision for remediation for matters including
these breaches (of $1 million) was disclosed in the
Bank’s FY20 Results.
Potentially impacted Great Southern customers are
those that sought financial hardship in 2015.
we estimate there to be less than 450 accounts
that may require remediation and / or goodwill payments.
The historic breaches do not impact Great Southern
borrowers’ obligations, nor do they affect the Bank’s
legal rights on loans that have previously been repaid
and/or recovered by the Bank. This has been confirmed
through extensive legal processes, including via the
Victorian Supreme Court.
The contrite tone in this media announcement contracts
with the indignant tone in the Bendigo and Adelaide
Bank’s Announcement headed ‘Response to Fairfax’s Great
Southern Articles published on 28 July 2018’.
These are some extracts:
The Bank did not act in an aggressive or unethical
manner in its dealings with Great Southern investors,
and rejects any accusations of this nature in the
In collecting the amounts rightfully owing to the
Bank, we have acted respectfully towards Great Southern
borrowers, in accordance with the law and consistent
with community standards and expectations.
The Bank is committed to helping customers who
experience financial hardship. Our policies and
procedures provide a consistent and sound framework to
actively consider applications for financial hardship in
accordance with legislative and regulatory requirements,
the Code of Banking Practice and industry standards.
The Bendigo Bank provided these interesting statistics in
- There were approximately 8,200 borrowers when Great
Southern collapsed in May 2009. Eight months later,
about 6,500 borrowers owed $508.2 million.
- 1,033 borrowers owed $86.1 million at 31 December
2017. The vast majority of borrowers have made
arrangements to repay the Bank.