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Banking

There are many factors to consider when opening a bank account or applying for a credit card. You need to be aware of the rules and regulations, terms and conditions, and your rights and responsibilities.

This page has information about:

You may need legal advice if you have a dispute with your bank or financial institution.

Opening a bank account

When opening a bank account or accepting a credit card, you’re entering into a contract with a bank or financial institution. This means you agree to their terms and conditions.

When opening an account you must show identification (ID). The law insists on the bank or financial institution asking for ID that meets the '100 point' checklist. This includes:

  • passport
  • birth certificate
  • citizenship papers
  • drivers licence
  • Medicare card
  • Centrelink concession cards.

Each form of ID carries a point value and you need to reach the 100 point mark before the account is opened.

The law has strict conditions to prevent fraud and any person opening an account in a false name will be charged with a criminal offence.

Giving your tax file number

If you don’t give your tax file number to your bank or financial institution, your account may be taxed at a higher rate.

Cheque accounts

You should check with your bank or financial institution about the terms and conditions for cheque accounts. Generally, cheque accounts don’t have an overdraft facility unless this is arranged with the bank.

You must not write a cheque if you know there is no money in the account to pay it. This is a criminal offence, and you’ll be sued for the amount of the cheque.

If you stop a cheque before it’s cashed, you should make sure you are legally entitled to do this or you could be sued.

Bank cheques

A bank cheque is issued by a bank in exchange for cash. It’s considered to be almost the same as cash and is accepted where a personal cheque would be unacceptable (eg to pay for the purchase of land). A bank will not pay on a bank cheque where it has:

  • been lost
  • been stolen
  • been forged
  • been changed without the bank’s agreement
  • a court order prohibiting the bank from paying.

Security

It’s usual for people to get money out of ATMs, pay bills by EFTPOS and use phone and internet banking. Banks and financial institutions generally follow an industry code of practice for these activities.

You should ask your bank or financial institution about how to protect your personal identification number (PIN) and personal information. You should also watch out for fraudulent emails which could interfere with your private information and access your account. See Identity theft.

The Australian Securities and Investments Commission (ASIC) have useful information on their website.

Getting a credit card

Having a credit card is like borrowing money from the bank or financial institution. If you have a credit card the bank or financial institution will allow you to have a set amount of credit. You’re required to pay at least the minimum amount of money per month. Any outstanding amounts will have interest charged on it.

If you apply for or get a credit card, you’re agreeing to the terms and conditions set by the bank or financial institution. You should compare providers for the best interest rate and conditions.

If you miss a monthly credit card repayment, or if it’s made more than 14 days late, this information can be recorded on your credit record and may affect your credit rating. See Credit reporting.

If you can’t pay the debt, don’t ignore it as it could cause serious problems for you. Talk to a financial counselling service or a lawyer about your options.

There are laws and industry codes of practice covering credit cards and borrowing money. If you have any problems with a bank or financial institution you can get help from a lawyer or other organisations such as  ASIC, the Financial Ombudsman Service (FOS), or the Credit and Investments Ombudsman (CIO).

Complaints about my bank or financial institution

If you have a complaint, speak with your bank or financial institution first to find out if they can help resolve your matter. They can tell you about their complaint resolution process. A complaint must include details such as:

  • name, address and phone number of the person making a complaint
  • name/s of any joint account holder
  • the amount that has been lost because of the problem
  • steps taken so far to resolve the matter.

If you don't have all of this information, you should still lodge the complaint with the financial institution. 

If you can’t resolve the matter with the financial institution, you can try to make a complaint to the FOS  or the CIO.

What should I do if my bank or credit cards have been stolen?

As soon as you’re aware of missing bank or credit cards, you should notify the bank or credit card provider immediately. You may need to take immediate action to protect yourself from liability and identity theft.

Unauthorised transactions on a credit card

If you find an unauthorised transaction on your credit card statement (eg being charged twice for a single purchase), contact your bank and ask them to chargeback the transaction. A chargeback can occur when an unauthorised payment to a store or business is reversed and the money is paid back to you.

Banks will only chargeback a transaction if it’s unauthorised. If you authorised the transaction, but have changed your mind or are unhappy with your purchase, the bank won’t recover  your money.

If you have a dispute about goods or services you have purchased, see Consumer rights.

If you’re unhappy with your bank’s response to your request to chargeback an unauthorised transaction, you can make a complaint to the FOS or the CIO.

If you find unauthorised transactions on your credit card statement that can’t be explained, you may be a victim of identity theft.

Mistaken transactions

If you make a mistake when transferring money electronically (eg entering the wrong BSB or account number), you should contact your bank or financial institution as soon as possible.

Most banks and financial institutions subscribe to the ePayments code that protects you from any loss as a result of mistaken transactions.

Under the ePayments code, if you contact your bank or financial institution within 10 days of when the mistaken transaction was made and the money is still in the recipient’s account, you should be able to get your money back. If it’s been more than 10 days since the mistaken transaction was made, you should still be able to get the money back if it’s still in the recipient’s account, but it will be a slower process.

If it’s been more than 7 months since the mistaken transaction was made, you may not be able to get your money back if the recipient has already spent your money. You should get legal advice.

If you’re unhappy with your bank or financial institution’s response, you can make a complaint to the FOS or the CIO.

Financial Ombudsman Service (FOS)

The FOS provides a free, external and independent process for resolving disputes between customers and banks.

They can help if you lodge a dispute and your bank or financial institution's actions have directly caused a financial loss of less than $309,000.

They deal with a wide range of disputes between banks and customers, including complaints about 'maladministration'—for example, complaints about a bank being negligent in giving loans when it was apparent the borrower could not afford the loan.

Before lodging a dispute, you should try and resolve your dispute with your financial services provider. Get legal advice.

Time limits

The FOS can’t consider your complaint if:

  1. the dispute happened more than 6 years before you first contacted the bank or financial institution in writing or
  2. it's been more than 2 years from when the credit contract has been rescinded; or
  3. it's been more than 2 years from when an IDR response has been received by a consumer from the bank or financial institution

You should get legal advice.

Complaints

Before FOS begins its investigation, it will register your dispute with them and check whether you have already complained to your financial service provider (FSP):

  • If you haven’t already complained directly to your FSP, FOS will refer your dispute to them. From the date of referral, the FSP will have 45 days to resolve the dispute. This 45 day period is known as Internal Dispute Resolution (IDR). The period for disputes involving financial difficulty is 21 days. If the matter isn’t resolved by your FSP in this period, FOS will commence its investigation.
  • If you have already gone through the IDR process with your FSP and your dispute has not been resolved, FOS will register your dispute, let the FSP know that you have lodged it with them and give the FSP a further 21 days to try and resolve the matter directly with you.  At the end of this period, if the matter remains unresolved, FOS will commence its investigation.

Throughout the registration and referral stage of a dispute FOS will continue to track the progress of your dispute while your FSP is working with you to resolve your dispute.

In most cases you will deal directly with a single FOS staff member, who will update you regularly about the progress of your dispute (Case Management), unless a decision is needed by an Ombudsman, Adjudicator or Panel.

If the dispute isn’t resolved, the FOS will investigate further and advise you and the bank or financial institution about how the dispute should be resolved. This is called a 'recommendation'.

If you don’t agree with the recommendation, you’re not bound by the recommendation, and you can ask the FOS to make a determination in your dispute. If either party doesn’t agree with the recommendation then the Ombudsman will make a determination.  If you accept the determination, the bank or financial institution is also bound to accept the determination.  If you don’t accept the determination, you retain your rights to bring court action against the bank or financial institution.

The FOS can also resolve matters by a conciliation conference. Your case manager can refer your matter to the ombudsman who will decide if your matter is suitable for this process.

Visit the FOS website for more information.  The CIO operates using a similar process.

If you have a dispute with your bank or financial institution, you should get legal advice.

Do I need legal advice?

You may need legal advice if you:

  • have unsuccessfully tried to resolve a dispute with your bank or financial institution
  • think you've been the victim of identity theft.

How to get legal advice

We may be able to give general legal advice about banking issues.

The following organisations may also be able to give legal advice.

Community legal centres give legal advice on a range of topics. Contact them to find out if they can help with your matter.

Queensland Law Society can refer you to a specialist private lawyer for advice or representation.

Who else can help?

These organisations may also be able to help. They don’t give legal advice.

Australian Competition and Consumer Commission (ACCC) supervises debt collection practices, sets industry guidelines with ASIC, and can accept some individual complaints if there is a pattern of breaching the law.

ASIC supervises debt collection practices for credit providers and external dispute resolution schemes which have to comply with ASIC guidelines. It also sets industry guidelines with the ACCC.

Office of Fair Trading supervises debt collector licencing and sets their code of conduct. They can sometimes help with negotiations with service providers.

Office of the Australian Information Commissioner handles complaints about misusing personal information and inaccurate credit reports.

Financial Ombudsman Service (FOS) has a free dispute resolution scheme for unresolved complaints about financial services, including banks and financial institutions.

Credit and Investments Ombudsman (CIO) is an independent dispute resolution scheme that helps resolve complaints between consumers and financial services providers who are participants of the scheme.

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