The new bank switching rule mean that changing your everyday transaction account from one financial institution to another has become a simpler and easier process.
On 1st July 2012, the Australian Securities & Investments Commission (ASIC) released guidelines which help customers switch any of their regular direct debits and credits to a new account with a new provider using a single signature form. The previous financial institution (bank, building society or credit union) is required to give a list of direct debits and credits to and from the old account over the past 13 months. The customer then chooses which credits and debits they want to switch to their new account.
The ASIC guidelines aim to make switching accounts less of a headache and to give consumers more freedom to choose the financial institutions they do business with. The rules also help financial institutions know their responsibilities to the consumer.
How Do The New Rules Work When I’m Switching Accounts?
- When you decide that you want to switch your everyday transaction account to a different financial institution (bank, building society or credit union) you contact them to let them know you plan to move your account.
- You can ask the new financial provider to contact the previous provider requesting a list of regular debits and credits to and from your old account over the past 13 months. Credits include items such as your salary, pension payments or income from investments. Debits include items such as utility bills, mortgage or rent, regular payments for memberships or subscriptions, for example.
- You select which of the debits and credits from the list you wish to switch to the new account. The new provider can help you choose which transactions to switch.
- When you have decided which credits and debits you want to switch to the new account, you sign a single form authorising the new provider to send your new account details to all the relevant organisations.
- Your regular credits and debits continue from your new transaction account.
Some Background to the New Guidelines
The new guidelines, which came into place on 1st July 2012, update both the Electronic Funds Transfer Code (EFT) and the new ePayments Code. The ePayments Code will replace the EFT Code on from 20th March 2013. The ASIC changed the account switching guidelines for both codes to allow all subscribers to transfer to the ePayments Code before the deadline in 2013.
The ePayments Code is designed to regulate electronic payments in Australia, including ATM, EFTPOS and credit card transactions, online payments, Internet and mobile banking and BPAY. The ASIC is responsible for monitoring and reviewing the rules and ensuring financial institutions comply.