Banking and finance

Automatic Teller Machines (ATMs)

ATMs are a common and easy way to access your money. They provide 24-hour banking convenience and also save banks and credit unions money on staff and administrative costs. You should familiarise yourself with your bank’s fees and charges, as both counter services and ATMs have fees.

ATM Fees

From 3 March 2009, all Automatic Teller Machine (ATM) 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 choose not charge fees and others 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.

Physical inability to use ATM’s

If you’re visually impaired, wheelchair-bound, or have any other disability which makes using an ATM impossible, many banks will waive fees on counter service.

Internet banking

Features

Internet banking lets you view and check your accounts, review recent transactions, apply for loans and credit cards, or transfer money and pay bills. Many internet banking products also have features where you can send money overseas quickly and safely to most countries in the world.

Using internet banking

Tips when using internet banking:

• 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.
• Always remember to log off when you finish using online banking.

Internet banking security

If you’re going to use internet banking, you should consider installing anti-virus software and a firewall on your computer system. You should also be wary of emails asking you to hand over confidential information such as your internet banking login and password.

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

Phishing

Phishing is when an unauthorised third party has your personal information. The most common example is sending 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 and requests that you respond immediately with your personal financial information such as a credit card number or bank account personal identification number.

The email might use words like ‘update’, ‘validate’ or ‘confirm’, implying that the sender already has the information. The email may even threaten that if the information is not provided within their time, your account could be closed or on the other hand, they 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’ve received an email like this, report it to the Australian Competition and Consumer Commission on 1300 302 502 or visit the SCAMwatch website.

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

Unauthorised transactions

Most banks and other credit providers follow 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 can reimburse you for unauthorised transactions to their account, depending on individual circumstances. You should scrutinise your account statements for any unauthorised, or overcharged transactions.

Telephone banking

Telephone banking services give you 24-hour access to your accounts from any touch-phone. It allows 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  displayed)
• check your loan account balances
• check interest earned for the last financial year.

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 from a landline. Be aware that calls made to 1300 or 1800 numbers from mobile phones can often attract significant charges.

Debit cards

A debit card lets you purchase something using money from your savings account. You can use the card at the point of purchase anywhere that accepts credit cards, including telephone and internet.

Some of the benefits of a debit card 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.

Direct debiting

A direct debit is when a periodic payment is directly debited from your savings account, or charged to your credit card. This is a convenient way to pay for things such as insurance premiums, e-TAG accounts, electricity and gas bills, and council rates.

Operating a direct debit facility

You should read the agreement carefully before entering into a direct debit arrangement. 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.

Cancelling a direct debit facility

In most cases you can cancel a direct debit authority at any time. If a contract with a business says 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.

Maintaining payments

Be aware that if you cancel a direct debit payment, you are still legally bound to pay the business 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.

Contact the Australian Financial Complaints Authority on 1300 565 562 or visit their website for more information.

Claims in relation to unauthorised debits

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

Where an unauthorised debit has been made to a credit card, the cardholder can recover the money using a ‘chargeback’. A 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.

If a dispute is over an unauthorised debit, you should get a claim form 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.

Banking fees and charges

Financial institutions such as banks, building societies and credit unions can charge you to use 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 monthly account keeping fee attached.

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) can allow an account to exceed the designated credit limit, up to a certain amount. However, they may also impose an ‘overdrawn account’ fee.

Do banks have to disclose these fees?

Yes under Government legislation and Code of Banking Practice, they must disclose all credit fees and charges.

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.

Avoiding exception fees

Most banking fees and charges can be easily avoided if you manage your finance carefully. It’s  important to check your account balances before making payments, and review your banking habits to minimise opportunities where exception fees might be charged.

Tips to avoid exception fees are:

• Check your account balances before making payments.
• Review your banking habits to minimise opportunities where exception fees might be charged.
• 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.

Visit the ABA website for more tips on how to avoid exception fees.

When things go wrong

If something goes wrong, the organisation you should contact will depend on the type of financial institution and the nature of the dispute.

The National Consumer Credit Code says 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.

Australian Financial Complaints Authority (AFCA)

The Australian Financial Complaints Authority is an external dispute resolution (EDR) scheme to deal with complaints from consumers and small businesses about financial services and products.

Contact the Australian Financial Complaints Authority on 1300 565 562 or visit their website for more information.

Credit Ombudsman Service (COS)

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

Contact the Credit Ombudsman Service on 1800 138 422, or visit their website for more information.

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 who have been given a credit licence by ASIC.

Australian Securities & Investments Commission (ASIC)

The Australian Securities and Investment Commission administers the National Credit Code, which provides consumer protection for credit on personal, household or domestic use. The legislation regulates the relationship between lenders and borrowers and covers things like 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. They do not get involved in mediation between financial institutions and their customers over monetary disputes. Visit the ASIC website for more information.