1 July 2012 consumer banking enhancements
From 1 July Australian bank customers will have more freedom to walk down the road and get a better deal with the introduction of new provisions.
A new 'tick and flick' service will allow depositors to move their money in deposit accounts with the stroke of a pen, putting more pressure on financial institutions to offer better value and service.
The Government is also bringing in new laws to protect consumers by cracking down on the unfair treatment of Australians with credit cards.
Treasury estimates that Australians will save around $225 million annually from just one of these credit card reforms alone – preventing lenders charging fees to customers who go over their credit limit, unless they've expressly asked for this service.
An Australian family could save something like $360 a year or more from the Government's new reform to force lenders to allocate repayments to higher interest debts first.
The new 'tick and flick' service will take the headache out of switching deposits by removing the burden of having to change the details of automatic debit and credit transactions.
Customers will now only need to sign a single form to authorise their new financial institution to do all the work for them.
The new institution will then arrange the transfer of all automatic transactions linked to the customer's account and inform associated creditors and debtors about the new account details.
Deposit institutions will also offer additional services such as obtaining a list of customers' automated transactions from their old financial institution if the customer can't remember them, or the ability to cancel any direct debits or credits if the customer doesn't need them any more.
This will give consumers the power to easily switch to another bank, building society or credit union if their existing institution isn't providing good value and service.
New protections with credit cards
The Government has also enacted new laws giving Australian consumers a fairer go with their credit cards from 1 July.
The reforms will crack down on lender practices that see consumers pay more interest than they should. The changes will:
Force credit card lenders to allocate repayments to clear higher interest debts first;
Stop lenders from approaching consumers with pre-approved, tick'n'flick offers to increase their credit limits;
Prevent lenders charging fees to customers who go over their credit limit unless they've expressly asked for this service;
Make it mandatory for credit-card application forms to include a clear summary of key account features;
Require all lenders to clearly warn consumers on their monthly credit statement of the consequences of only making minimum repayments.
1 July 2012.