Information is key to managing your bank accounts. In the third article
explaining the new Code of Banking Practice, which becomes effective from
April 3, Charlene Clayton examines what your bank promises to give you by
way of information.
Information is key to managing your bank accounts. In the third article
explaining the new Code of Banking Practice, which becomes effective from
April 3, Charlene Clayton examines what your bank promises to give you by
way of information.
The banks adhering to the new Code of Banking Practice have promised to
give you, the client, better information.
You can expect clear written explanations of the key features of services
and products as well as details about on how your account works, such as.
* How to stop a cheque or other types of payment;
* When funds can be withdrawn after a deposit has been paid into your
account and when funds begin to earn interest;
* When you have an unpaid or stale cheque; and
* When your account details may be passed to credit reference agencies.
Charges
Your bank will give you some details of charges for basic banking services,
but ask if you want full details.Your bank will also tell you whether fees
or charges are negotiable and will notify you of changes to ATM charges
through ATM messages and/or advertisements in the media.
Interest rates
As a client you are entitled to information on the interest rates which
apply to your account(s), when interest will be deducted or paid to you and
the basis on which interest is calculated.
Overdrafts and Fixed Term Products
You should be informed of any additional charges and interest you may have
to pay when:
* Your account becomes overdrawn without prior agreement;
* You exceed your overdraft limit;
* Your loan falls into arrears; or
* You decide to settle a loan early.
Loans
The banks have undertaken to market and approve loans in a way that does
not lead you to take on more than you can afford.
You have a duty to keep your bank up to date about your financial state of
affairs.
Your bank will help you understand the wider responsibilities and rights
that you will have as a home owner, and at your request will assist you to
work out how much you can afford.
When applying for a home loan, your bank will explain how your loan works,
what the costs are and the benefits of paying off your loan faster.
The impact of variable and fixed interest rates will be clearly explained
to you.
Your bank will also explain to you that you could lose your house if you
don`t keep up your loan repayments. You will be informed of the additional
interest costs if you fall into arrears and the legal steps your bank has
to take to repossess your house if you are unable to to pay.
Building Quality
When your bank inspects a property you want to buy, it is solely to assess
the value of the property which you are using as security against your loan.
Your bank does not have the skills or the resources to comment on the state
of the building or accept any responsibility for its condition even if the
loan is a development or building loan.
If you ask, your bank will provide you with:
* The assessed value of the property; and
* The minimum replacement cost of the building and improvements for
insurance purposes.
The banks say you must be satisfied that you are buying a good quality home
and, if necessary, get expert advice.
When your mortgage bond has been paid up, your bank will inform you how
annual insurance premiums, other charges and administrative matters will be
handled.
Savings and Investment Accounts
Your bank will give you clear and appropriate information on the different
types of savings and investment accounts available to help you decide what
suits your needs.
It has also agreed to help you understand how your savings and investment
accounts work and to tell you about any additional charges or loss of
interest for withdrawal or early cancellation.
But, you must get independent tax advice.
Your Responsibilities
It`s up to you to manage your savings and investments properly to meet your
personal financial needs and circumstances. If you have an investment which
rolls over automatically, your bank expects you to notify it if you do not
want to continue the investment.
Plain Language
Your bank has agreed that all its written terms and conditions will be fair
and that your rights and responsibilities will be set out clearly in plain
language, with legal and technical language used only where necessary.
Closing Your Accounts
Your bank will not close your account without giving you reasonable notice
to your last address. But your bank reserves the right to protect its
interests if you default on your accounts or if you are suspected of fraud.
Information about Changes
Occasionally terms and conditions of products and services may change and
your bank will give you reasonable notice.
If there have been significant changes to terms or conditions over the
year, you will be sent a new copy of the terms and conditions or a summary.
If there is a change in the charges for basic banking services, your bank
has undertaken to give you reasonable prior notice by
letter/statement/other personal notice; notices in branches; ATM messages;
or via advertisements in the media.
Your bank says it will try to give you as much notice as possible of
changes in interest rates.
In the case of home loans, your bank will give notice in the media of any
increase (but not decrease) in interest rates.
Marketing of Services
Your bank may give you details of its other services and products, but you
can say, in writing, if you do not want to receive this information.
Your bank may also give certain information about you to subsidiaries
within its group for marketing purposes.
If you are a new client your bank will ask for your consent and if you are
an existing client, your bank will inform you that you can refuse permission
Remember if you do not refuse permission, your bank will presume that you
have agreed to receive information.
Banks will ensure that all promotional material is clear, fair, reasonable,
not misleading and complies with the appropriate advertising authority
guidelines.