BUSINESS | MONEY

Bank switching made easy

Michelle Baltazar

New laws that may come into effect from July next year will allow people to switch banks without the usual admin hassles.

At present, anyone who changes banks will have to update all outstanding direct debit and direct credit details onto the new bank, a burdensome chore that has deterred many from switching bank providers.

But the government this year has proposed new reforms that will take away that responsibility away from the bank account holder. Instead all they have to do is fill up a single form and the new bank they switch to will look after contacting all the creditors and debtors attached to the account.

That is, the new bank would then contact the customer’s old bank and all the relevant creditors and debtors.

If the proposal becomes law, it would be implemented by July 1 next year.

"This represents a step towards fairer banking for all Aussies … the major banks for too long have been able to get away with not putting the customer first, largely because they knew it was too hard for people to up and leave once they had them handcuffed to them,” said Greg McAweeney, general manager of RaboDirect.

According to a Newspoll survey conducted in July this year, 49 per cent of Australians say the related administrative work, such as updating direct debits, stops them from switching to a different bank.

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