Smarter Banking - Know your banking rights and responsibilities

Important Notice

This booklet gives information of a general nature and is not intended to be relied on by readers as advice in any particular matter.

You should consider consulting a financial adviser regarding how this information may apply to your own circumstances.

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So far in this booklet we’ve looked at your rights in the relationship with your bank.

You also have obligations and personal responsibilities when you do your banking. Meeting those responsibilities is not just a legal obligation under the contract or terms and conditions of your account – it’s also in your own best interests. If you fail to keep your part of the agreement, you may suffer financial loss. It may also make it difficult for your bank to provide you with the most suitable products and services.

Let’s take a look at some of these responsibilities and what you should do to protect your financial wellbeing, such as making sure you compare different banks and their products and services before making a decision, appointing a Power of Attorney, and taking precautions so you don’t get into financial difficulty.


It’s your responsibility to read and understand a contract or terms and conditions before you sign or enter into a contract with your bank.

It’s important to know what to expect from your bank and what the bank expects from you before agreeing to a contract or opening an account.

If you don’t understand anything in the contract or the terms and conditions, you should ask the bank to explain or seek independent legal and/or financial advice. Asking questions now can help avoid misunderstandings later.


The information you provide to your bank or other financial institution about your identity must be true and accurate.

When you open an account with a bank for the first time, the bank will require adequate identification to ensure you are who you say you are. The identification check is important to make sure someone is not illegally using your identity, and helps fight financial crimes, such as money laundering, terrorism financing and fraud.

The most common way to establish your identity is to present your passport, driver’s licence or proof of age card, along with one or more types of non-photographic identification, such as your birth certificate, citizenship certificate, utility bill, Medicare card, Commonwealth pensioner concession card, taxation notice or even an ATM card for an account you hold with another bank.

Banks will only accept originals or certified copies of identity documents and certain forms of photographic or non-photographic identification. Some banks offer electronic identity verification, where you enter your personal details securely on their website, and the bank checks them against government or third-party databases.

If you don’t have the required documents, speak to your bank.

Did you know?

Banks are required by law to identify you using documents that provide evidence of who you are.

In 2006, the Australian Government introduced legislation aimed at preventing money laundering and financing for terrorism. A fundamental requirement of this law is that certain businesses, including banks, ‘know their customer’. Accordingly, banks must verify the identity of people who are signatories to a bank account.

The law also requires banks to report suspicious transactions, or cash transactions of $10,000 or more, to the Australian Transaction Reports and Analysis Centre (AUSTRAC).


It’s your responsibility to provide complete and accurate information to your bank, for example, when you open an account or apply for credit or a loan.

By giving your bank a truthful picture of your circumstances and financial situation, it will be able to offer you appropriate products and services.

For example, if your bank has an accurate understanding of your finances, it’s less likely to offer credit you’re unable to repay. You can get into debt trouble if you misrepresent your financial situation to get a higher level of credit than you can service – a bad outcome for you and for the bank. You may even be breaching the law in relation to fraudulent activity.



When you open a bank account, you can decide whether to provide your tax file number (TFN) to the bank. If you choose not to provide your TFN, the bank must, by law, deduct from any interest paid an amount of tax calculated at the top marginal tax rate, and send it to the Australian Taxation Office (ATO). If you do provide your TFN, the bank is obliged to pass this information to the ATO.



If you’ve set up a direct debit to make a regular payment, you should always ensure you have enough money in your account to cover the payment. If there’s not enough money in your account at the time the direct debit is processed, your bank may charge fees and the payment may be dishonoured.

If you don’t have sufficient money in your account, consider transferring money from another account if you can. Alternatively, if you’re unable to find the money, before the direct debit is processed, you should contact your bank and request that the payment be delayed until the money is available.



It’s your responsibility to provide clear instructions to your bank, including about payments and transfers. This will ensure your bank can follow your instructions or execute your transactions efficiently, for example, by making sure payments and transfers are cleared and settled to your account.

The bank will require certain instructions depending on the type of payment or transfer and how it will be completed, for example, whether it is a wire transfer completed via an application form in a branch, or whether it is a bill payment made via Internet banking.

It’s essential that you provide the correct information to your bank. The correct information will make sure the payment or transfer is completed and made to the correct account.

Did you know?

There are different rules which apply to unauthorised transactions and disputes for bank accounts and scheme debit and credit cards (e.g. Visa, MasterCard). You should report any unauthorised transactions immediately in the first instance to your bank.

Double check the details

If you’re making a payment or transferring money from one bank account to another that you or someone else holds, or if you’re setting up a reocurring payment, or if you’re using your credit or debit card to make a purchase over the telephone or via the Internet, you should always double check the details before completing the transaction or payment.

For example, when you’re transferring money from one account to another using Internet banking, the most important details to get right are the BSB and account number, as these are the details the bank uses to make the payment.

When you’re paying a bill online, you need to carefully check the payment details, such as the payer number and customer reference number. This is especially important if you’ve got multiple accounts or services with the same provider as it can be easy to get them confused (e.g. utility or telecommunications companies that provide a range of services). If you’ve set up payment details for your regular bills, make sure you identify each payer distinctively so you don’t confuse and transfer money or make a payment to the wrong provider.


The ePayments Code protects you whenever you transfer money electronically, such as:

  • using an ATM to withdraw or deposit money
  • using Internet, mobile or phone banking
  • using EFTPOS to buy goods or services
  • using your credit card over the phone or via the Internet
  • using a gift card from a store to pay for goods or services.
Image of two hands – one hand is typing at a keyboard the other is holding a credit card

All banks that offer electronic banking services subscribe to the ePayments Code.

If you’ve taken care not to let others know your PIN or any other access code to your account, you’re covered by the ePayments Code if, for example, there are unauthorised transactions on your credit card, your card is stolen and used fraudulently, or a merchant debits your card twice.

You’ll need to meet certain requirements under the ePayments Code to ensure you’re protected. For example, you must take reasonable steps to keep information such as your PIN, access code and password secure. You mustn’t allow anyone else to use your ATM card, debit card or credit card. As soon as you become aware that your card has been lost or stolen, or that someone else may know your PIN, access code or password, you must notify your bank.

For more information about steps you can take to keep your computer secure and to protect yourself when using Internet banking, click here.



If your account statement has transactions you believe are unauthorised, you should notify your bank immediately.

If your card has been lost or stolen, you should notify your bank immediately.

In the case of a stolen card, you should also report the theft to the police.


It’s your responsibility to read your account statements and make sure all activities and entries are correct and authorised.

Your bank will provide you with an account statement at the agreed frequency when there have been transactions on your account. Depending on the instructions you’ve provided to your bank, you might receive your account statement as a paper document in the mail or an electronic statement via Internet banking.

If there have been unauthorised transactions, the sooner you notify your bank, the sooner it can investigate and take any necessary action. This can also prevent further unauthorised transactions being made.

Did you know?

The ePayments Code covers transactions where you don’t sign to authorise the transaction, such as:

  • transactions made via Internet, phone or mobile banking
  • online payments
  • BPAY transactions
  • transactions where you use a PIN, such as ATM, EFTPOS or credit card transactions
  • Visa PayWave or MasterCard PayPass transactions.

If you pay in person and sign, the ePayments Code doesn’t apply. However, if there is a problem with this transaction you’re covered by other scheme rules, such as the credit card chargeback rules. There are time limits, so it’s important to check your account statements or online balance regularly. If there is an unauthorised transaction, you should in the first instance report the transaction immediately to your bank or card issuer.

Did you know?

Under the ePayments Code, individual customers are not liable for any loss arising from an unauthorised transaction if it’s clear they haven’t contributed to the loss.

Therefore, reporting any transactions that you believe are unauthorised as soon as possible will help your bank take any necessary action and guard against any further unauthorised activity.


It’s a good idea to shop around for your banking products and services and compare products and providers before you make a decision.

Some banks have tools on their websites to help you easily compare the different features of different bank accounts and loan products. These tools include comparison tables with details about the product, including interest rates, fees and other features, such as the number of free transactions or any minimum balance required.

Some banks have a product or loan selector where you answer a few questions and the selector identifies the bank’s product or loan that reflects your answers. If you don’t have access to the Internet, you can call the bank or visit a bank branch, and bank staff can help you choose a product or loan.

Other companies provide information about bank accounts, other financial products, and credit products which you may find useful, including:

  • Canstar Cannex produces information, research and ratings designed to help consumers find the right banking or financial product. For more information, go to the Canstar Cannex website:
  • Infochoice translates complex financial product data into a user friendly format to make it easier for you to make informed decisions. For more information, go to the Infochoice website:
  • Choice tests a wide range of consumer goods and services and provides information to help consumers make confident choices. For more information, go to the Choice website:



If you’ve already got a relationship with a bank, talk to them about your needs and what products and services they can offer you. Shop around as well – see if another bank can offer you a better option.

Here are some things to consider when you shop around for a bank account, other financial product or credit product:

1. Put together a checklist of what’s important to you, such as:

  • Features – free, limited or unlimited transactions; account, transaction or withdrawal fees; exception fees; interest rates; minimum opening balance; minimum account balance; periodic payments
  • Services – electronic banking (Internet, phone and mobile), direct debits, overdraft facility, cheque facility, overseas transactions
  • Additional – fraud and security protection, complaint handling, money management assistance, convenient location, hours of operation, disability access and services.

2. Visit different banks or check out their websites to find out about the different products and loans on offer. For example, ask about fees on your transaction account and how they might be affected if you open a high-interest savings account. Check the best interest rate available when you’re about to renew your term deposit – rather than just letting it roll over, or check to see how much you might save on interest repayments if you set up a mortgage offset account.

Banks will compete hard for your business, so take the time to look for the product and service that best suits your needs.



In Australia, a credit report is kept for anyone who has applied for consumer credit.

It’s a good idea to review your credit report, say, every year, regardless of whether you’re applying for credit. That way, if there are any errors, you can take action early to make sure they’re corrected before you make your application for credit.

With identity theft on the rise, it’s also wise to monitor your credit report regularly to ensure that criminals have not used your name to access credit without your knowledge.

For more information about contacting a credit reporting agency, click here.


A bank or credit provider will consider various factors when deciding whether to approve your application for credit. One of these is your credit history.

Your chances of being approved for credit will increase if you’ve used credit in the past and there is no record of a default in your repayments over the last seven years, and there is nothing to suggest that you've got multiple credit facilities that could mean you’re overcommitted. A demonstrated ability to repay shows you’re more likely to be ‘creditworthy’.

It’s important to understand that you’re establishing your credit history every time you use credit. If you don’t meet your obligations under the credit contract, not only may there be problems with your existing credit provider, but you may also damage your ability to get credit in the future.

Your credit information is held by a credit reporting agency, and is the official record of your credit history. Credit providers can obtain a credit report from the credit reporting agency and use the report to decide whether or not to approve your application. You have a right to access this information, and to ask for it to be corrected if you think it’s incorrect.

For more information about credit products and your credit report, refer to the ABA’s booklet ‘Smarter Credit: Make credit work for you’. For a free copy, freecall 1800 009 180 or go to the ABA website:

Did you know?

Recent reforms to the Privacy Act 1988 mean that new kinds of personal credit-related information can be collected about you. This includes the date you opened a credit account, the type of credit account, the current limit of each open credit account, the date a credit account was closed, and repayment history.

Repayment history includes information about whether you’ve made a payment on time or whether you’ve missed a payment within a 24-month period. This information may be provided to a credit reporting agency and included on your credit file.

It is anticipated from March 2014, licensed credit providers will be able to share this information with each other to help determine whether you’re eligible for credit.


Keeping your finances under control is important for both your financial and emotional health. If debt builds to a point where you’re unable to meet your repayments, it can have detrimental effects on your life and your ability to borrow in the future.

If you’re having trouble repaying a debt, act sooner rather than later. The most important step is to contact your bank and other creditors and let them know you’ve got a problem. If your bank or credit provider is notified early, it’s more likely they’ll be able to work with you to find a solution. Doing this may also avoid problems with credit history later.

It’s important to keep your bank or credit provider informed and talk to them early if you think you may need help, especially if your creditors hold security over your home or other assets.

Helping you if you’re experiencing financial difficulties

Your bank will try to come to a workable solution to help you through a period of financial difficulty. This can involve working out what assets you have available and what you need to repay, and understanding your income and spending to develop a reasonable plan for repaying the debt.

Retail banks have specialist financial hardship teams who will take the time to understand your situation, and provide assistance and information to find the best possible way to help you control and manage your financial obligations with the bank now and in the future.



  1. Don’t borrow more money than you can afford to repay.
  2. Make sure you pay your bills on time.
  3. Keep copies of all your financial records in a safe place.
  4. If you think you may be unable to meet your repayments, call your bank or credit provider to discuss the problem so you can work together on an alternative repayment plan.
  5. If you need help managing your finances, speak to a free and independent financial counsellor. A financial counsellor can help you put a budget in place and work with you and your creditors. For more information about financial counsellors, click here

Each person’s circumstances are unique and different banks will have different procedures. Generally, your bank will want to:

  • help you find solutions if you’ve missed monthly payments on your credit card
  • discuss possible ways to help if you’re unable to make contracted repayments on a home or personal loan, such as deferring or reducing loan payments, restructuring or consolidating loans, altering loan repayments to interest-only, or waiving certain fees and charges
  • discuss alternative banking arrangements that may be more suitable for your circumstances.

Importantly, you don’t have to be in arrears for help to be provided.

Remember: Banks treat each case individually. It’s important that you keep in touch with your bank throughout the repayment process, especially if your circumstances change.

For more information about free, independent and confidential financial counselling services that are available to you, click here.

For more information about financial hardship, creating a budget and tools and tips to help you control your finances, refer to the ABA’s ‘DoingItTough’ website:

Did you know?

Your bank will, with your agreement, try and help you overcome financial difficulties.

Banks offer a number of options to customers whose circumstances temporarily prevent them from repaying their loans and credit cards. The solutions offered will differ depending on your circumstances.

Customers can apply for financial hardship assistance and access internal and external dispute resolution processes if they’re not satisfied with their bank’s response.

A number of consumer fact sheets can be found at the ABA’s website at:, including:

  • ‘Financial hardship: How your bank can help if you’re having money troubles’
  • ‘Dealing with debt: How banks can help if you’re experiencing financial difficulty’.

For more information about budgeting and developing a money management plan, refer to the ABA’s booklet ‘Smarter Banking: Make the most of your money’. For tips on keeping your credit arrangements under control, refer to the ABA’s booklet ‘Smarter Banking: Make credit work for you’. For a free copy, freecall 1800 009 180 or go to the ABA website:



Recognising when you could get into trouble with your finances allows you to avoid any difficulties before they become bigger problems.

If you’re feeling financially squeezed or know you’re facing financial pressures, you should speak to your bank.

Remember: If you’re having trouble repaying a debt, the sooner you act the better. The longer you leave a financial problem, the harder it will be to sort out your problems and the less options you’re likely to have available. If your bank is notified early, they’ll be in a better position to work with you to arrange a solution. However, if your bank doesn’t know about your situation, they can’t help you. It’s always the best advice to speak to your bank as soon as you can.


Do any of the following questions describe your situation?

  • Are you ignoring bills, skipping payments on your credit card, or struggling to make the rent or mortgage repayment – and hoping you’ll make up for it next time?
  • Are you only making the minimum payment on your credit card each month?
  • Are you getting a new credit card to pay off another credit card, or accepting offers to increase the limit on your credit card without considering your financial position?
  • Are you struggling to pay for basic living expenses like food, utilities, clothes and medical bills – after you’ve made all your loan repayments?
  • Do you consistently spend more than you earn?
  • Do you regularly get cash advances on your credit card?
  • Have you sought a loan from a payday lender?
  • Do you frequently sell or pawn your possessions?
  • Do you go without meals or without heating to save money?
  • Have you recently sought financial help from friends and family or from welfare or community organisations to manage your expenses, bills or debts?
  • Are you unsure how much you owe or how much debt you have?
  • Do you lose sleep worrying about how you’ll repay your debts?
  • Are you receiving letters or phone calls about outstanding debts from a debt collection agency?

If these questions apply to you, you should speak to your bank about your situation, and discuss some possible solutions to help you get control of your finances. In some instances, you may feel more comfortable speaking to a free and independent financial counsellor. click here for information about financial counsellors.


Establishing joint account holders or two-to-sign processes

An account held by more than one person is known as a ‘joint account’. You may want to establish a joint account with your spouse, partner or family member to help you more efficiently and conveniently manage your money.

You can request special authorities on most accounts to allow either sole or joint operation of the account, such as ‘either to operate’ or ‘anyone to operate’. Some banks may implement special restrictions on the account at the request of customers.

A ‘two-to-sign’ process is where you ask your bank to ensure that two people authorise transactions on the account, e.g. both you and your partner. This is not a joint account, but is a joint operation of the account.

A joint account or a two-to-sign process can be a good way to establish an informal arrangement if an account holder needs help managing their financial affairs, but is generally physically and mentally fit to operate the account.

Remember: When opening a joint bank account or becoming a co-borrower, it’s important to understand the legal implications before you do so.

Appointing a Power of Attorney

If you’re unable to make decisions about your finances and property, a trusted person can make those decisions on your behalf if they have been appropriately appointed.

A Power of Attorney is a formal arrangement where you choose who makes decisions for you if it becomes necessary (for example, you’re going overseas for a period, or you’re going to be physically unable to manage your account as usual). There are different Powers of Attorney, so it’s important to select the right instrument to suit your needs.

For example, a general Power of Attorney is useful if you want to put in place a temporary arrangement or for a specific purpose. Alternatively, an enduring Power of Attorney can be designed to take effect at a later time and gives someone the power to make decisions for you, in the event you lose the capacity to make those decisions yourself.

If you appoint a general Power of Attorney and then lose legal capacity at a later stage, the document will no longer be valid. The person you appointed won’t be able to make decisions on your behalf. Your attorney’s powers also stop if the time period specified has passed, you become bankrupt, the attorney resigns or you die.

Did you know?

The laws about Powers of Attorney vary from state to state. There are several types of enduring Power of Attorney, relating to the type of decisions that may be made. For example, a Power of Attorney may be required for financial and legal decisions, and another instrument for decisions about medical treatment or lifestyle decisions.

When putting in place a Power of Attorney, it’s important to select the right person and be clear about what you expect them to do for you. Ensure you obtain proper advice from a lawyer or the Office of the Public Advocate (OPA) so that you fully understand the process.

Did you know?

You can change or cancel a general Power of Attorney at any stage, for example, when your circumstances change or you change your mind about the appointment. Someone who is the right person to appoint now might not be the right person in a year or so. Depending on what you want, this could mean appointing a different person, or the same person again with different responsibilities.

If you decide to change the attorney and/or their powers, you’ll need to tell any people or organisations that are relying on the existing forms, such as your bank or other businesses.



Banks often discover that customers who have a Power of Attorney have not had the instrument set up appropriately to allow financial and property decisions to be made. In this instance, there can be complications if financial decisions are needed about property sales.

If you don’t have a Power of Attorney and you become incapable of making decisions for yourself, there may be no-one with the authority to manage your financial affairs and a court or tribunal may have to appoint someone for you.

The Office of the Public Advocate (OPA) in each state represents the interests of people with decision making disabilities. Many people think they’ll never be in a situation where they won’t be able to make decisions for themselves, but you could be in an accident at any age.

So it’s sensible to consider putting arrangements in place to ensure your financial affairs and other important decisions, such as medical and lifestyle, can be managed by someone else in the event you don’t have the capacity to make these decisions yourself.

For further information about Powers of Attorney, guardianship issues, and links to relevant State and Territory agencies see:



If in doubt, seek independent legal or financial advice.

If you're looking to give a guarantee, the bank should notify you that you should seek independent financial and legal advice before you sign the guarantee, to ensure you understand the effect of the guarantee.


When assessing an application for credit, banks and other credit providers want to feel confident that the applicant will be able to repay the debt. They’ll look at the person’s credit history and may secure the debt against an asset belonging to the person, such as their house.

However, some people may be applying for credit for the first time and so have no credit history, or may not have a good credit history. The applicant may also have no assets with which to secure a loan.

In such cases, the bank may require that someone else – who has a good credit history or assets the bank can call upon – guarantees the loan.

Remember: Giving a guarantee is different to being a co-borrower. Unlike a guarantor, a co-borrower receives a benefit from the loan.

Think very carefully before you agree to give a guarantee!

As a guarantor, you sign a contract and take on a legal and financial responsibility to repay the loan if the borrower defaults. You aren’t simply witnessing a document or giving a reference – you’re taking on a financial risk that you have no control over. If the borrower doesn’t repay the loan, the bank can require you to do so. You could lose any asset you put up as security, such as your home.

It may be difficult to say no to someone who asks you to guarantee a loan, as it’s usually a family member or close friend who makes the request. However, before you agree, you must be very sure that the person will be able to make the repayments.

Under the Code of Banking Practice, the bank must give you certain financial information about the borrower and the loan they’re seeking, as well as information setting out your obligations as guarantor. Be sure you understand this information before committing yourself.

Did you know?

If you’ve guaranteed a loan and the borrower defaults, the bank or other credit provider can take legal action against you for the amount owed. This can include not just the amount originally borrowed, but also interest, fees and any legal costs that may be incurred.

Did you know?

If you guarantee someone’s overdraft or credit card, you can limit your liability to a fixed amount by notifying the bank or other credit provider. However, you can’t do this for a secured loan, such as a home or personal loan.


It’s a sad fact that there are criminals who will try anything to obtain money that does not belong to them. Unfortunately, criminals are always looking for opportunities to commit crime, so it’s everyone’s responsibility to make it as difficult as possible for them to succeed.

Banks have put in place technology systems and physical security processes to make it harder for people to commit crimes. But you also need to take measures to safeguard your money, such as protecting your PIN, access code and password.

Now that so many transactions are undertaken online, there is another opportunity for criminals to try to take advantage of unsuspecting bank customers.

The possibility of fraud can never be totally eliminated, but by taking sensible precautions you can minimise the risk of being a victim.

Did you know?

Some people have difficulty remembering a PIN. Writing the number down creates a security risk and may also be a breach of the card’s terms and conditions. Importantly, if you’ve breached the terms and conditions, you won’t be protected if you need to recover money from your bank for an unauthorised transaction. You should choose a PIN which is easy to remember, but not obvious such as your birth date. ATM keypads have both numbers and letters, so you could choose a word. If you’re unsure how to change your PIN, speak to your bank.



Here are some tips on protecting your money:

  1. Take care when choosing your PIN, access code and password, and keep them secure.
  2. Make your PINs and passwords difficult to guess. For example, don’t use details of your birth date, telephone number or sequences such as ‘1234’.
  3. Memorise your PIN, access code or password. If you’re unable to do this, keep any record of these details separate from your ATM card, debit card or credit card.
  4. Never reveal your PIN, access code or password to anyone, not even a family member or friend. If you need assistance to conduct your banking transactions, speak to your bank about arrangements that can be put in place to assist you.
  5. When you use an ATM or EFTPOS terminal, cover your hand when entering the PIN to ensure no-one can see the numbers you’ve entered.

In the next few sections of this booklet, we’ll discuss measures you can take to protect yourself, your computer and your personal and financial information.

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