Following an “administrative error” in which Suncorp failed to remind mortgagors of their home insurance obligations, brokers are being advised that their customers may be affected.
In an update to brokers, Suncorp revealed that it has begun notifying customers of an “administrative error” which resulted in the bank breaching its obligations under the Banking Code of Practice.
As part of the Banking Code of Practice 2013, lenders are obliged to annually remind customers who have a credit facility secured over their primary place of residence (or their residential investment property) to obtain relevant insurance, as per the terms and conditions of their mortgage.
The new Banking Code of Practice, which is set to come into force on 1 July, also incorporates a requirement for lenders to annually remind mortgagors of their obligations to insure the property (either primary place of residence or a residential investment property) which is securing their mortgage.
While Suncorp had historically been including this reminder on customers’ bank statements, it had revealed that “for a period of time”, this message had not been included on some bank statements.
Suncorp has said that the bank statements have since been amended and updated to include the home insurance reminder and has reportedly advised the Code Compliance Monitoring Committee of its breach.
The non-major bank has said that it will be writing to all impacted customers “with active loans with Suncorp” of the error “throughout June 2019”. It said it would also be including the home insurance reminder message that they will now see on their future Suncorp bank statements.
In a note to brokers, the bank said: “While the error does not impact brokers directly, it does affect those brokers’ customers whose bank statements failed to include the reminder notice.”
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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