The banking industry’s new financial hardship package should prompt insurers “to look at their practices and see that they’re keeping up”, according to a consumer advocacy group.

“The insurance industry is probably fairly far behind banking when it comes to dealing with financial hardship,” Consumer Action Law Centre CEO Gerard Brody told insuranceNEWS.com.au.

“We’ve had concerns with the limited hardship arrangements in [the general insurance] code of practice and we haven’t seen anything more progressive as an industry on this issue.”

The Code of Banking Practice already included provisions for customers facing financial difficulty, but banks have now added to these.

The move gives more substance to the code, Mr Brody says. “Particularly training of call centre staff and information about financial hardship on banking websites – we think these are really good signs they take this issue seriously.”

Help may include deferring or reducing loan repayments, waiving fees or restructuring loans.

Of those customers who request hardship assistance, about 75% need it for three months to overcome temporary difficulties, according to the Australian Bankers’ Association.

The banks’ new financial hardship package includes industry guidelines on supporting customers, a commitment to train staff about help programs, standardised forms for financial counsellors acting on customers’ behalf and a pledge to display information about help in branches.

It also includes a consumer fact sheet and a revamped website with a list of phone numbers for banks’ financial hardship teams.

From the end of next month banks will add a button to their websites asking: “Are you experiencing financial difficulty?” This will link to information on help schemes.

Mr Brody says some of these measures, such as links on websites or information being sent to customers, could be adopted by the insurance industry.

He says insurers should also improve debt collection, make premium payments more flexible and introduce Centrepay, to let Centrelink users pay through regular deductions from their income.