ACCOUNT SWITCHING

Background

From 1 November 2008, all Authorised Deposit-taking Institutions (ADIs) with retail customers are required to provide ‘listing and switching’ services. These services are designed to make bank account switching easier for consumers by assisting with the process of transferring automatic payments (direct debits and credits) from their old bank account to their new bank account.

The requirements for ADIs providing the services have been included in the procedures for the system through which direct debits and credits are processed – the Bulk Electronic Clearing System (BECS) – as well as in the Electronic Funds Transfer (EFT) Code of Conduct.

The Requirements

Upon customer request, the customer’s ‘old’ ADI is required to provide, within five business days, a list of automatic payments made and received by the customer for the previous 13 months (the ‘13 month list’). The old ADI will also assist in identifying the customer’s own ‘pay anyone’ internet payments.

Having obtained the 13 month list of automatic payments from their old ADI, the customer can obtain assistance with updating their automatic payments from their ‘new’ ADI. The assistance provided by the new ADI will include a customised switching service, to allow a customer to generate industry standard ‘change of account’ letters to provide to the organisations with which they have established debit and credit arrangements.

If requested by the customer, the new ADI will also assist the customer in notifying the relevant billing and crediting organisations. In such cases, the new ADI will advise the ADIs that represent the relevant debiting and crediting organisations of the customer’s new account details; this information is required to be passed on to debiting and crediting organisations within three business days.

Transitional Issue

Prior to the commencement of the formal listing and switching requirements, some ADIs had not been retaining the full set of information in relation to automatic payments. For a short period, a small number of ADIs will not be able to provide full information against each automatic payment going back the full 13 months. In this case ADIs will provide assistance on details of payments transactions on the list that are incomplete.

Complaints

Customers not receiving these services or having problems with the provision of the services will be able to take their complaint to an external dispute resolution (EDR) scheme. In most cases, this will be the Financial Ombudsman Service; some ADIs, however, are members of the Credit Union Dispute Resolution Centre (CUDRC) or the Financial Co-operative Dispute Resolution Service (FCDRS). The EDRs will attempt to resolve complaints in the normal manner, taking into account the requirements set out in the updated BECS procedures and EFT Code of Conduct. Where a systemic problem arises, the EDR schemes will refer the issue to ASIC and ASIC will take further action as appropriate.

Implementation

The Reserve Bank of Australia has overseen the development and implementation of the listing and switching services and, as part of that oversight, asked for bi-monthly progress reports from the Australian Bankers Association (ABA), the Australian Payments Clearing Association (APCA) and Abacus – the industry association for building societies and credit unions. An initial report from the ABA and subsequent progress reports from APCA on behalf of the industry are published below, including the final report, issued prior to the implementation of the services.

ABA Initial Report - PDF 45K
19 February 2008

APCA First Progress Report - PDF 94K
Considered by the Payments System Board on 9 April 2008

APCA Second Progress Report - PDF 40K
30 April 2008

APCA Third Progress Report - PDF 178K
30 June 2008

APCA Fourth Progress Report - PDF 51K
1 September 2008

APCA Final Progress Report - PDF 38K
31 October 2008

Further Information

Further information on the listing and switching services can be found on APCA’s website, ASIC’s FIDO website and the websites of individual financial institutions.