The Rudd Government's new measures to make it simpler for bank customers to switch their accounts to another provider become fully operational tomorrow (Saturday).
We have consistently said we are committed to ensuring healthy competition in the banking sector so that it works for Australian families, not against them.
From 1 November, our Account Switching Package comes into effect with banks, credit unions and building societies now offering full listing and switching services to customers.
This means Australian families and pensioners have genuine choice among financial institutions and have more flexibility to shop around for services that best suit their needs.
Financial institutions are now also obligated to assist customers who are unhappy about the level of fees and charges, or poor quality of service, to switch to an alternative provider.
Banks and other financial institutions are already communicating the new bank switching measures to customers and this in itself will help to increase choice and competition.
The Rudd Government is determined to take decisive action to strengthen our financial sector and protect Australians from the fall-out from the global financial crisis.
That is why we moved quickly to alleviate pressures in the Australian financial sector to protect depositors and our institutions' funding arrangements to ensure they remain globally competitive. This is critical for ensuring of financial institutions continue to have sufficient funds to lend to households and small business.
It is also why we increased funding sources for smaller mortgage lenders through the Australian Office of Financial Management (AOFM).
The industry has been working with the Rudd Government to implement the measures to support genuine choice and flexibility.
But when we say we want financial institutions to work for their customers and not against them we are serious, so there are also mechanisms to enforce accountability.
Customers who feel their financial institution has failed to help them move to a new provider should call ASIC's switching hotline on 1300 300 630 for advice on how to make their bank accountable for its actions.
Information for consumers on this service is available through ASIC's website: www.fido.gov.au. Industry will be publishing information on the service through the Australian Payments Clearing Association's website: www.apca.com.au.31 October 2008
Attachment A
How to switch banks
- Set up the new transaction account. Leave the old transaction account open with some money to cover any automatic payments that need to be made during the changeover period.
- Ask the current financial institution for a list of all your regular direct debits and credits. The current financial institution will give you a list of automatic payments from the last 13 months. All financial institutions are obliged to offer this service from 1 November 2008.
- Take that list to the new financial institution. They will help you re-establish those payments on the new account. They will also help you give your new account details to organisations that you pay or that pay you.
- Once you are sure that all your automatic payments have been updated to your new account, you can safely close your old account.
- If your financial institution doesn't provide these services you should complain to them and if not satisfied, you should contact the relevant Ombudsman. ASIC's hotline 1300 300 630 can help with this.