Shocking report exposes bank profiting from dead—are your loved ones' accounts safe?
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In a revelation that has sent shockwaves through the banking sector and beyond, a bank has been exposed for a practice that seems straight out of a grim tale—profiting from the dead.
Over four years, this bank, along with its subsidiaries, was found to have charged fees and interest to the accounts of deceased customers, raising serious concerns about the sanctity of one's finances even after passing away.
The discovery has prompted calls for tighter regulations and greater accountability within the banking industry to protect vulnerable customers, even after death.
The Banking Code Compliance Committee (BCCC), the watchdog that oversees the sector, has sanctioned the Bank of Queensland.
This action follows the discovery of over 2,500 instances where the bank failed to halt or refund charges incorrectly levied on the accounts of the deceased between 2019 and 2023.
The total amount charged by Bank of Queensland in fees and interest to these accounts was a staggering $158,834.
This situation was exacerbated by the bank's inability to detect these charges promptly, which begs the question—how safe are the accounts of our loved ones once they are no longer with us?
In September 2022, the BCCC requested the bank to conduct an internal audit, which revealed significant weaknesses in its systems for managing the funds of deceased members.
Although the bank had made some strides in improving the management of deceased customers' money in 2021, it failed to implement these measures thoroughly.
Ian Govey AM, Chair of the BCCC, emphasised the gravity of the breaches by publicly calling out the bank.
'We expect banks to take swift and effective action to address non-compliance and prevent further customer harm,' Mr Govey stated.
He criticised the bank's response to the breaches as lacking urgency and taking too long to implement effective measures to address the root causes and prevent recurrence.
The Bank of Queensland has since reimbursed the wrongly charged money between 2022 and 2024 and has improved its internal processes regarding the estates of deceased clients.
The bank has acknowledged its errors and has stated that it has altered its operations to prevent such charges from happening again.
'BOQ acknowledges the BCCC investigation and findings in relation to BOQ’s management of Deceased Estates and has apologised and completed remediation of impacted customers over the past two years,' a BOQ spokesperson said.
The bank also highlighted that in 2022, it identified operational control weaknesses, made leadership changes, and announced a strategic priority to build stronger foundations by enhancing its operational resilience, control frameworks, and risk culture.
'BOQ has made considerable progress over the last two years in strengthening risk and controls, risk culture and addressing root cause issues,' the spokesperson added.
This investigation into the Bank of Queensland is part of a broader focus on how banks treat the estates of deceased clients.
Mr Govey has urged banks to ensure their compliance frameworks are robust and appropriate for the complexity of their operations, which is crucial for upholding the Banking Code's commitments and minimising poor customer outcomes.
A 2023 investigation by the watchdog found that six banks had charged the accounts of dead clients, leading to separate inquiries into three of these banks.
In a similar case, ANZ was called out in July 2024 for charging the accounts of its deceased clients and agreed to pay back $3.25 million.
The BCCC's report highlighted banks' fragmented systems and complex organisational structures, which allowed many of these issues to slip through the cracks.
The report stated, 'Had banks made greater efforts to improve systems and processes in recent years, many of these issues could have been avoided.'
We must be vigilant about the financial institutions we trust with our money and that of our loved ones.
It's essential to regularly review and update the details of our accounts and ensure that our estates are managed correctly.
If you have concerns about how a bank handles a deceased relative's account, do not hesitate to contact the bank for clarification and, if necessary, escalate the matter to the BCCC or other relevant authorities.
In other news, ANZ has also been sanctioned last year for charging fees to the estates of deceased clients.
The Banking Code Compliance Committee investigated the matter and publicly named ANZ for failing to promptly halt the fees or issue refunds after the clients' deaths. You can read more about it here.
Have you or someone you know experienced issues with a bank regarding the accounts of a deceased loved one? Share your experiences in the comments below, and let's help each other stay informed and protected.
Over four years, this bank, along with its subsidiaries, was found to have charged fees and interest to the accounts of deceased customers, raising serious concerns about the sanctity of one's finances even after passing away.
The discovery has prompted calls for tighter regulations and greater accountability within the banking industry to protect vulnerable customers, even after death.
The Banking Code Compliance Committee (BCCC), the watchdog that oversees the sector, has sanctioned the Bank of Queensland.
This action follows the discovery of over 2,500 instances where the bank failed to halt or refund charges incorrectly levied on the accounts of the deceased between 2019 and 2023.
The total amount charged by Bank of Queensland in fees and interest to these accounts was a staggering $158,834.
Fees and interest were charged to deceased customers' accounts by the Bank of Queensland and its subsidiaries over four years, resulting in sanctions. Credit: Reddit
This situation was exacerbated by the bank's inability to detect these charges promptly, which begs the question—how safe are the accounts of our loved ones once they are no longer with us?
In September 2022, the BCCC requested the bank to conduct an internal audit, which revealed significant weaknesses in its systems for managing the funds of deceased members.
Although the bank had made some strides in improving the management of deceased customers' money in 2021, it failed to implement these measures thoroughly.
Ian Govey AM, Chair of the BCCC, emphasised the gravity of the breaches by publicly calling out the bank.
'We expect banks to take swift and effective action to address non-compliance and prevent further customer harm,' Mr Govey stated.
He criticised the bank's response to the breaches as lacking urgency and taking too long to implement effective measures to address the root causes and prevent recurrence.
The Bank of Queensland has since reimbursed the wrongly charged money between 2022 and 2024 and has improved its internal processes regarding the estates of deceased clients.
The bank has acknowledged its errors and has stated that it has altered its operations to prevent such charges from happening again.
'BOQ acknowledges the BCCC investigation and findings in relation to BOQ’s management of Deceased Estates and has apologised and completed remediation of impacted customers over the past two years,' a BOQ spokesperson said.
The bank also highlighted that in 2022, it identified operational control weaknesses, made leadership changes, and announced a strategic priority to build stronger foundations by enhancing its operational resilience, control frameworks, and risk culture.
'BOQ has made considerable progress over the last two years in strengthening risk and controls, risk culture and addressing root cause issues,' the spokesperson added.
This investigation into the Bank of Queensland is part of a broader focus on how banks treat the estates of deceased clients.
Mr Govey has urged banks to ensure their compliance frameworks are robust and appropriate for the complexity of their operations, which is crucial for upholding the Banking Code's commitments and minimising poor customer outcomes.
A 2023 investigation by the watchdog found that six banks had charged the accounts of dead clients, leading to separate inquiries into three of these banks.
In a similar case, ANZ was called out in July 2024 for charging the accounts of its deceased clients and agreed to pay back $3.25 million.
The BCCC's report highlighted banks' fragmented systems and complex organisational structures, which allowed many of these issues to slip through the cracks.
The report stated, 'Had banks made greater efforts to improve systems and processes in recent years, many of these issues could have been avoided.'
We must be vigilant about the financial institutions we trust with our money and that of our loved ones.
It's essential to regularly review and update the details of our accounts and ensure that our estates are managed correctly.
If you have concerns about how a bank handles a deceased relative's account, do not hesitate to contact the bank for clarification and, if necessary, escalate the matter to the BCCC or other relevant authorities.
In other news, ANZ has also been sanctioned last year for charging fees to the estates of deceased clients.
The Banking Code Compliance Committee investigated the matter and publicly named ANZ for failing to promptly halt the fees or issue refunds after the clients' deaths. You can read more about it here.
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