Can the new Code of Practice restore the reputation of the Banks?

Can the new Code of Practice restore the reputation of the Banks?

Aussies everywhere, unless they are in the minority of mattress money hoarders, will likely be happy to know about the initiation of a new banking Code of Practice, approved by the Australian Securities and Investments Commission on Tuesday this week.

The rewrite, which CEO of the Australian Banking Association, Anna Bligh says aims to be more consumer-friendly and transparent, was submitted to ASIC for final approval in December 2017 and will be fully implemented by July 2019. It was originally put forward by ASIC in 2015, prior to the commencement of the royal commission hearings. After the series of scandals uncovered in recent months, Bligh hopes that the new Code will take an important step forward in restoring the reputation of Australia’s banking industry.”

“The new Code will introduce a range of new measures to make banking products easier to understand and more customer focussed”, says Bligh “it represents a stronger commitment to ethical behaviour, responsible lending, greater financial protection and increased transparency.”

Training and care

Under the Code, there will be a commitment to training staff to take better care of vulnerable customers, such as Indigenous customers, people on pensions, and those with disabilities.

Assistance for those on low incomes in getting the right accounts for their circumstances will also be provided; customers in these situations will be made aware of accounts with low or no fees attached.

Customers who are deemed at risk of financial difficulty will also have measures put in place to help them.

More manageable debt

Banks will make it easier to cancel credit cards, inform customers when their interest-free period is ending, and implement more responsible lending conditions, including credit limits that are repayable over a five-year period.

Commitments to reducing the hard sell of products to customers of personal loans, such as insurance, that are unwanted or unnecessary have also been promised.

The new Code could mean good news for potential home owners, as there will no longer be fees and commission on lenders mortgage insurance, and fact sheets on policy features will be provided as standard.

Action to protect the rights of guarantors of loans will also be implemented.

Small business protection

As well as customers, moves are being made to protect the interests of small businesses, such as the simplification of contract jargon, and limits imposed on the conditions of loans of under $3 million. Banks will increase communication with small businesses, giving them more notice when conditions change and being more transparent when using valuers and insolvency practitioners.

Enforcement

“The new Code must have teeth. A key part of that will be ensuring that oversight body, the Banking Code Compliance Committee, has the resources and sanctions it needs to hold the banks to account.” said Consumer Action Law Centre CEO Gerard Brody, “Let’s not forget that many cases at the Hayne Royal Commission have been clear breaches of the old Code that were never enforced.”

The new Code will be under stronger enforcement by the independent Banking Code Compliance Committee, in an attempt to severely limit breaches. The BCCC will be given more power, enabling them to publicly name banks and condemn any breaches and issue formal warnings.

The Code will also be reviewed every three years, as opposed to the previous implementation of a five-yearly review.

Is it enough?

As pointed out by consumer groups, there are gaps in the Code. Some of these include:

  • Debt collection: Recent news had shown that some debt collectors, such as ACM Group, have been found guilty of misconduct; banks have not committed to accountability for debt collectors behaviour.
  • Fees: High fees like overdraft fees and late payment fees on credit cards deal those in hardship the biggest blow, and banks will continue to charge them even under the new Code.
  • Direct debits: Tighter regulations on banks cancel direct debits upon request have not been mentioned under the new Code.
  • Credit Cards: The ABA has imposed a five-year payable credit card debt, but consumer groups believe that this should be reduced to two years.

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Learn more about bank accounts

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. You will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

Opening a bank account for someone under 18

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

Can foreigners open bank account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How do you find a bank account number by name?

For privacy reasons, Australian banks won’t hand out account numbers or other details about their customers. However, if you provide a bank with a BSB and account number, they should be able to confirm if those numbers belong to one of their customers.

How do you change your account name on NAB banking?

Changing the name on your NAB bank account is straightforward, as long as you have the right documents.

If you’ve just got married, divorced or legally changed your name, here’s what you need:

  • Married – a marriage certificate
  • Divorced –your ‘decree nisi’
  • Legal name change –your legal name change certificate

You can take either the original document, or a certified copy, into a NAB branch, where it needs to be sighted by a bank employee and a copy taken.

Your NAB bank account name will be updated immediately. New debit, ATM and credit cards with your updated name will also need to be issued. These usually take between five to 10 working days to be posted out to you. Your existing cards will keep working until you activate your new ones.

If you haven’t legally changed your name, but just want to change your account nicknames, you can log onto NAB and do it through the Settings/Mailbox menu.