Risk banks will pay damages may better protect older Australians

The final report of the Royal Commission into Banking Misconduct recommends that sections of the Banking Code of Practice be made into law.  A key chapter of the Code of Practice relevant to Caxton Legal Centre clients is the provision for banks to take extra care with customers who are vulnerable due to elder abuse and financial abuse. 

Cybele Koning, Director – Family, Domestic Violence and Elder Law at Caxton Legal Centre, has considered whether creating legislation based on the Banking Code of Practice would better protect older Australians from financial elder abuse. 

“If there was the possibility the bank might have to pay damages for the loss suffered by an older person because the bank has not taken the care they should, the banks might behave differently to prevent financial abuse occurring in the first place,” said Ms Koning. 

She suggests that a legal right to damages for the loss suffered by vulnerable customers would need to be part of any new laws for this to occur. 

“Significant financial harm can be experienced by older people who take out loans or provide guarantees for family members with no financial benefit to themselves,” said Ms Koning.  

“Banks should be taking extra care in these situations to make sure there is no undue pressure from relatives.” 

Caxton Legal Centre assisted almost 600 people experiencing elder abuse through its specialist seniors’ service in 2017-18. Read more in Caxton’s most recent Annual Report.