Banking
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How can I open a bank account?
If you open a bank account or accept a credit card you are entering into a contract with a bank or financial institution. This means you agree to the terms and conditions set by the bank or financial institution.
When you open an account you must show identification. The law insists on the bank or financial institution asking you for identification which meets the '100 point' checklist. Some of the identification accepted includes a passport, birth certificate, citizenship papers, driver's license, medicare card, Centrelink concession cards. Each form of identification carries a point value and you need to reach the 100 point mark before the account is opened.
The law has strict conditions so as to prevent fraud and any person opening an account in a false name will be charged with a criminal offence.
Do I have to tell the bank or financial institution my tax file number?
If you don't tell the bank or financial institution your tax file number, your account can be taxed at a higher rate directly from your account.
Are there things I need to know about having a cheque account?
You should always check with you bank or financial institution about the terms and conditions of having a cheque account. Generally a cheque account does not have an overdraft facility unless this is arranged with the bank.
You must not write a cheque knowing there is no money in the account to pay the cheque. If you do this you can be charged with a criminal offence and can be sued for the amount of the cheque.
If you stop a cheque before it is cashed, you should ensure that you have a legal entitlement to stop the cheque or you could be sued.
Is there a difference between a bank cheque or personal cheque?
A bank cheque is a cheque issued by a bank in exchange for cash. It is considered to be almost the same as cash and is accepted where a personal cheque would be unacceptable (e.g. to pay for the purchase of land). A bank will not pay on a bank cheque where:
- the cheque has been lost
- the cheque has been stolen
- the cheque has been forged
- the cheque has been changed without the agreement of the bank
- a court order prohibits the bank from paying.
Are there any security matters that I should be aware of when banking?
It is usual for people to get money out of ATMs, pay bills by EFTPOS and use telephone and internet banking. Banks and financial institutions generally follow an industry code of practice regarding these practices.
You should ask your bank or financial institution about how to protect your pin number and personal information. You should also watch out for fraudulent emails which could interfere with your private information and access your account.
The Australian Securities and Investments Commission also have useful information on their website - FIDO financial tips and safety checks.
Are there things I should be aware of when getting a credit card?
A credit card is borrowing money from the bank or financial institution. If you have a credit card, the bank or financial institution allows you to have a set amount of credit. The bank or financial institution requires that you pay at least the minimum amount of money with any amount outstanding having interest charged on it.
If you do apply for or get a credit card you are agreeing to the terms and conditions set by the bank or financial institution. It is best to shop around for the best interest rates and conditions.
If you cannot pay the debt, don't ignore it as there could be serious problems for you. Speak to a financial counsellor or a lawyer about your options.
There are laws and industry codes of practice that cover credit cards and borrowing money generally. If you have any problems with a bank or financial institution you can get help from a lawyer or other organisations such as the Australian Security and Investment Commission and the Financial Ombudsman Service.
If I have a complaint about my bank or financial institution, who can I complain to?
Try and speak with your bank or financial institution first to see if they can help you with your complaint. Your bank or financial institution can advise you of their complaint resolution process. A complaint must include details such as:
- name, address and phone number of person making complaint
- name of any joint account holder
- the amount that has been lost because of the problem
- the steps taken so far to resolve the matter.
If you have no success, you can try the Financial Ombudsman Service.
What does the Financial Ombudsman Service (FOS) do?
The Financial Ombudsman Service (FOS), provides a free, external and independent process for resolving disputes between customers and banks.
The FOS can assist if the bank or financial institution's actions have directly caused a financial loss of less than $150,000 if before 1 December 2004 or if after that date, less than $280,000.
The FOS can deal with a wide range of disputes between banks and customers including complaints about 'maladministration' e.g. complaints about a bank being negligent in giving loans when it was apparent that the borrower could not afford the loan.
Is there a time limit on making a complaint to the FOS?
Yes, the FOS cannot consider your complaint if the dispute happened more than six years before you first contacted the bank or financial institution in writing.
What does the FOS do with my complaint?
The FOS will write to let you know they have received your complaint and will tell you if they can deal with it. They will also give you information about the process of resolving your complaint. If the FOS can't deal with your matter, they can refer you to an organisation that may be able to help you.
If the FOS takes on your matter you are given a case manager and they will first advise the bank or financial institution of your complaint. The bank or financial institution then has 30 days to respond. Sometimes it may take longer if your matter is complex and documents need to be located.
If the dispute is not resolved the FOS will investigate it further and they will then advise you and the bank or financial institution on how the dispute should be resolved. This is called a 'finding'.
If you or the bank or financial institution does not agree with the finding, it will then be referred to the Ombudsman who can make a recommendation.
If you don't agree with the recommendation, the FOS can't assist you any further. But, if the bank or financial institution doesn't agree with the recommendation, the Ombudsman can make a determination and then the banking or financial institution must obey this.
The FOS can also resolve matters by a conciliation conference. Your case manager can refer your matter to the Ombudsman and then the Ombudsman will decide if your matter is suitable for this process.
Where can I find out more about the FOS?
The FOS has a website that provides up to date information and also has a 'do it yourself checklist' to see if your complaint can be handled by them.
If you have concerns about any matters concerning your bank or financial institution you should get legal advice about your options.