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consumers
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Banking and finance 

Automatic Teller Machines (ATMs)
Internet banking
Telephone banking
Debit cards
Direct debiting
Banking fees and charges
When things go wrong

Automatic Teller Machines (ATMs) 

ATMs are a common and readily available means of accessing your money.

They provide 24-hour banking convenience for customers and also save banks and credit unions money on staff and administrative costs.

Despite the popularity of ATM’s, most financial institutions still offer a counter service for deposit and withdrawal transactions. However, customers should familiarise themselves with their bank/credit union’s fees and charges, as both counter services and ATMs may attract fees.

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ATM Fees 

From 3 March 2009, all Automatic Teller Machines (ATMs) owners in Australia introduced Direct Charging; changing the way cardholders are charged for using an ATM in Australia that is not owned by the cardholder's financial institution.

Under Direct Charging, the ATM owner charges a fee direct to the cardholder's account at the time of the transaction for using their ATM. The fee may differ across ATMs, depending on the ATM owner or type of transaction.

The cardholder may also be charged a fee by their own institution for using another owner's ATM.

The intent of Direct Charging is to make ATM fees more transparent, provide greater choice for customers and to increase competition amongst ATM owners.

From 3 March 2009, any time a person uses an ATM in Australia that isn't owned by their own bank, building society or credit union, the ATM will display the amount of the direct charge. At this point, cardholders can either:

  • agree to the charge and continue the transaction, immediately incurring the fee, or
  • cancel the transaction without incurring the fee.

Some institutions have network agreements allowing their customers to use other branded ATMs, such as St George and Westpac customers; or the credit unions' Redi Teller/Redi Bank ATMs.

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Physical inability to use ATM’s 

For customers who are visually impaired, wheelchair-bound, or have any other disability which makes use of ATMs impossible, many banks will waive fees on counter service.

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Internet banking 

Features 

Internet banking allows you to view and check your accounts, review recent transactions, apply for loans and credit cards, or transfer money and pay bills – all online.

Many internet banking products also have features where customers can send money overseas quickly and safely to most countries in the world (and in most foreign currencies) using an overseas telegraphic transfer.

Most banks offer Internet banking facilities, but you will need to register with your bank to gain access. You will then be given a password that allows you to use your accounts online.

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Using internet banking 

Some tips to remember when banking via the internet:

  • Never store your login and password together on your computer or in your email account.
  • If you accidentally enter the wrong password or login, a message saying ‘invalid login’ will appear. If this happens three times, you will be locked out and unable to access your account. To regain access, call the bank.
  • Some banks may charge fees. To find out what they are, type ‘online banking fees’ into the search function at the bank’s website.
  • Be careful about transferring funds to another person’s account. If you enter the wrong information and submit, you will not be able to retrieve the funds.
  • Always print or write down the lodgement and receipt number of transactions completed online.
  • If you receive an email from any source, requesting you provide or confirm your bank account details, do not reply, even if the email appears ‘legitimate’. Check the sender’s contact telephone number from a reliable external source, such as the White Pages and discuss the email with them directly.
  • Always remember to log off when you finish using online banking.

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Internet banking security 

There are security issues that need to be considered when using Internet banking.

If you are going to use internet banking, you should consider installing anti-virus software and a firewall on your computer system and keeping them up to date.

You should also be wary of emails requesting you to hand over confidential information such as your internet banking login and password.

For information and tips on protecting your personal information as well as your money visit the Australian Bankers' Association (ABA) website.

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Phishing 

Phishing is the harvesting of your personal information by a third party not authorised to have access to that information.

The most common example involves the sending of a ‘spoof’ email which states that it’s from a bank, online payment service, internet service provider or even a government department.

The email is often on what appears to be official letterhead, which bears the corporate logo of the company and requests the recipient to respond immediately and provide their personal financial information such as a credit card number or bank account personal identification number (PIN).

The email may use words like ‘update’, ‘validate’ or ‘confirm’, implying that the sender already has the information. The email may even threaten the recipient that if the information is not provided within a stipulated time the recipient’s account maybe closed or conversely, may offer a valuable prize if the information is provided.

If you receive an email which requests you to provide personal or financial information – do not reply.

Do not use the links in the email to get to any other web page. Instead either telephone your bank on a trusted number, or go to their website directly by typing the full web address into your browser to seek verification.

If you suspect that you’ve received such an email, report it to the Australian Competition and Consumer Commission on 1300 302 502 or visit the SCAMwatch website at www.scamwatch.com.au

Avoid filling out forms online where personal financial information is requested. Only use secure websites, or a telephone, to transmit sensitive information.

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Unauthorised transactions 

Most banks and other credit providers adhere to the Electronic Funds Transfer Code of Conduct, which is a voluntary code of practice monitored by the Australian Securities and Investments Commission (ASIC).

Under the Code, member banks may reimburse a customer for unauthorised transactions to their account, depending on individual circumstances.

You should scrutinise your account statements for any unauthorised, or overcharged transactions.

Many banks publish security guides on their websites and this provides important information on precautions that you can take to protect your information online.

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Telephone banking 

Features 

Telephone banking services give you 24-hour access to your accounts from any touch-phone and allow you to:

  • check your account balances
  • transfer funds between accounts (yours and other member accounts)
  • make BPAY payments
  • check transactions (select the account and have a number of previous transactions read to you)
  • check your loan account balances
  • check interest earned for the last financial year.

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Fees and charges 

Most financial institutions have their telephone banking service linked to a 1300 number, which means you only pay the cost of a local call, regardless of where you ring from within Australia.

It is important to note however, that the local call rate applies only to calls made from landline telephones. Calls made to 1300 or 1800 numbers from mobile phones, can often attract significant charges.

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Debit cards 

Many financial institutions now provide cards which feature a debit facility.

You can use the card at the point of purchase anywhere that accepts credit cards, including telephone and internet. However, unlike using a credit card, the purchase amount is directly debited from your savings account.

Some of the benefits of this type of facility include:

  • convenience
  • no transaction fees
  • no need to carry large amounts of cash
  • reduces the number of ATM transactions you make
  • using your own money saves paying interest charges you might incur by using a credit card.

Talk to your financial institution to see whether this is a good option for you.

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Direct debiting 

A direct debit authority is an agreement allowing periodic payments to be directly debited from your savings account, or charged to your credit card.

Many people find them a convenient way to pay for things such as insurance premiums, e-TAG accounts, electricity and gas bills, and council rates.

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Operating a direct debit facility 

You should read the agreement carefully before entering into a direct debit arrangement. You should be aware that, if you don’t have enough funds to meet the scheduled payment, you may be charged a dishonour fee.

It is wise to monitor the payments being deducted from your account, or charged to your credit card, and be prompt to cancel the authority when you no longer need the service.

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Cancelling a direct debit facility 

In most cases a direct debit authority may be cancelled at any time. However, if your contract with the trader stipulates that payment must be made by direct debit, you should speak with a solicitor BEFORE revoking your authority. 

For direct debits that are linked to your savings or cheque account, you should write to the bank where your account is held.

If you instruct your bank to cancel the direct debit they must make sure that no more payments under the direct debit authority are debited from your account.

To cancel a direct debit on your credit card you must write a letter to the trader and send a copy of that letter to your financial institution.

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Maintaining payments 

Be aware that if you cancel a direct debit payment, you are still legally bound to pay the trader for services or goods already provided to you and, if you stop making payments, you may incur default penalties, under the terms and conditions of your contract.

For more information concerning direct debiting, contact the Financial Ombudsman Service.
Tel: 1300 780 808
Postal address: GPO Box 3, Melbourne VIC 3001
Website: www.fos.org.au 

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Claims in relation to unauthorised debits 

The Australian Bankers Association Code of Banking Practice is the industry’s customer charter for good banking service.

If you want to lodge a complaint about an unauthorised or irregular direct debit, the Code states your bank must promptly process the complaint. You will not be asked to first sort out the matter with the supplier concerned.

Where an unauthorised debit has been made to a credit card, the cardholder may seek to recover the money by a process known as ‘chargeback’.

‘Chargeback’ is the term used for debiting a merchant’s bank account, for the amount of a transaction they had previously taken from your credit card account.

There are a number of reasons why a transaction can be charged back, but they mainly fall into two categories:

  • The merchant has made an error at the point of sale, for example, overcharging or an expired card has been used
  • The cardholder or the Card Issuing Company (“the Issuer”) is disputing the transaction. For example the card or cardholder were not present at the point of sale and possible fraud may have taken place.

When a dispute arises over an unauthorised debit, a claim form should be obtained from your bank.

The bank will notify the third party’s sponsor financial institution that must then provide proof of the debit within 7 days.

General information about chargeback can be found in the terms and conditions booklet which is provided by the bank at the time they issue your credit card.

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Banking fees and charges 

Financial institutions such as banks, building societies and credit unions can charge you for the use of their facilities and to access your accounts.

A bank, building society or credit union may apply a fee to your savings account where:

  • the account falls below a minimum balance amount
  • the number of free (non-deposit) transactions allowable per month is exceeded
  • you use another bank’s ATM.

Certain types of accounts may also have a designated monthly account keeping fee attached.

Financial institutions must not mislead or deceive you about any fees and charges that apply to your account and have responsibilities to provide you with accurate information about the cost of your banking.

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Bank exception fees 

Exception fees are disclosed in the account terms and conditions and may be charged when credit card payments are late, payments are dishonoured or credit card limits are exceeded.

Some banks (and other credit providers) may at their discretion, allow an account to exceed the designated credit limit, up to a certain amount. However, they may also impose an ‘overdrawn account’ fee.

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Do banks have to disclose these fees? 

The disclosure of credit fees and charges is mandated by Government legislation.

The transparency of fees is also prescribed under the banking industry’s own Code of Banking Practice.

The Australian Bankers’ Association (ABA) believes it’s beneficial to enhance community understanding about exception fees, and fully supports competitive fee offerings by individual member banks.

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Can exception fees be waived? 

Some banks offer selected accounts for eligible customers where exception fees and other types of fees are waived or capped.

The ABA provides a list of various accounts from their member banks which have low exception fees. This list can be viewed on the ABA website.

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Avoiding exception fees 

Most banking fees and charges can be easily avoided by careful management of your finances. 

It is important to check your account balances before making payments, and review your banking habits to minimise opportunities where exception fees might be charged. 

Some other tips to avoid exception fees are:

  • Choose the right account that suits your transaction and saving needs. For example, if you regularly exceed your account balance, choose one that has an overdraft facility.
  • Consolidate your accounts to help you keep track of your funds more easily.
  • Create a budget and plan your outgoing spending so that your financial commitments match your incoming funds.
  • Keep a small balance in your account to cover unexpected withdrawals.

For more tips on how to avoid exception fees visit the ABA website.

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When things go wrong 

The organisation to contact in the event of a dispute will depend on the type of financial institution and the nature of the dispute.

The National Consumer Credit Code which came into effect on 1 July 2010 stipulates that all credit providers must belong to an External Dispute Resolution (EDR) scheme.

EDRs provide a free mediation service for consumers who are experiencing difficulties with their lender, and are a simpler and friendlier alternative to resolving disputes in court.

There are currently two ASIC approved EDR schemes, the Financial Ombudsman Service (FOS) and the Credit Ombudsman Service (COS).

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Financial Ombudsman Service (FOS) 

FOS handles complaints about banks, credit unions and building societies, life insurance companies, superannuation providers, financial planners, life insurance brokers, stockbrokers, investment managers, friendly societies, time share operators and general insurance companies and their agents.

For more information, contact the Financial Ombudsman Service on 1300 780 808, or visit their website at www.fos.org.au.

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Credit Ombudsman Service (COS) 

COS handles complaints about credit unions and building societies, non-bank lenders and financial planners.

For more information, contact the Credit Ombudsman Service on 1800 138 422, or visit their website at www.cosl.com.au.

Note: The national credit laws now enable both the FOS and COS to deal with complaints about debt collectors (who are authorised by a lender to collect credit repayments on their behalf), non-lenders (such as finance brokers) and other intermediaries who have been given a credit licence by ASIC.

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Australian Securities & Investments Commission (ASIC) 

The Australian Securities and Investment Commission administers the National Credit Code, which is designed to provide consumer protection for credit obtained wholly or predominantly for personal, household or domestic use.

The legislation regulates the relationship between lenders and borrowers and covers such things as contractual disclosure, fees and charges, mortgages, guarantors and credit advertising.

If you think your bank or credit provider may have engaged in misconduct or illegal activity, you can lodge a complaint with ASIC, who will investigate whether the bank/credit provider has complied with the legislation.

ASIC do not get involved in mediation between financial institutions and their customers over monetary disputes (overcharging, refunds etc).

Complaints involving such issues should be pursued via your bank’s EDR scheme.

For more information about the new national credit laws and their implementation visit the ASIC website.

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