The Government announced reforms designed to make it easier for people to switch banks overnight, with a Treasury-led working party to ensure the changes are enacted by July 1 2012.
The changes are a result of a report prepared by former Reserve Bank (RBA) Governor Bernie Fraser, which recommended a scheme allowing consumers to switch deposit accounts by filling out one form, which would be provided by their new bank of choice.
The new bank would then contact the customer’s old bank and all creditors and debtors attached to the account, to remove the need for the customer to deal with changing their direct debit and credit details – removing a significant burden from both consumers and businesses.
RaboDirect General Manager Greg McAweeney said the move represents a step towards fairer banking.
“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. We are in total support of Fraser’s recommendations and see it as a win for all banking customers.”
Describing the proposed switching arrangements as “customer-friendly,” Fraser said they and could help to nudge hesitant switchers into action.
“They would avoid heavy costs to industry, and deliver a better alignment of incentives between acquiring and losing institutions.”