BANK ACCOUNT SWITCHING < ‘Timings For information ‘Recommendatlon/ss + That you note the tps camently under way fo enhance the Gavemment's bank switching Noted ‘KEY POINTS + Mesures to make simple for bank customers to switch their tensction account another ‘provider becune filly operational on | November 2008 These incde a requirement that Facil instittions provide customers with tof thc icc debits, dret ees and ‘ther automatic payments over the previous 13 months. The customer's new ination can then assist fhe customer with re-establishing these direct debits and credits, + Other element ofthe bank switching page include a review of mortgage enry and exit {fees by ASIC anda hin for customer complaints about bnk products. informations slo ‘blished on the ASIC's consumer web site (FIDO) end on the undertandingmney gov. Seb + Thereview of mortenge entry and ex foes was completed in April 2008 and found: 2008 “The sim ofthe mens isto promote competition by encouraging consumer to shop round forthe rnsution account tat offers the beat valu for money. This should {ndretly improve competition for other prodact, inching mortgnges, ince mast customers find it convenient to have allihoat of their accounts wth singe inattation, ‘Betwoon Noveruber 2008 and October 2009, there were 1,818 forms requesting switching information lodged. This does not include the many Avstallans who | ‘itched without forall uing this element ofthe package sco more than 27 milion ‘new accounts were opened ove the sue} “The total numberof accounts opened or closed cach month hus roughly quadrupled since the Account Switching Package took fect. “Morigage fee, particularly ‘earl termination fos’ area considerable cost, While -Austalia hs higher earl terminalion fees than the UK or USA, Australia hs ‘comparable ongoing fens and the lowest ety fees. Exit fees vary dramatically betwemn Australian lnders. Of the 298 home loa products cxamined, 159 cary no dacharge fee and 98 have no fee if terminated within 3 years. INCONFIDENCEee ‘24 December 2009 ‘Treasurer . Seckion 22. ~Not relevant ‘JrurTHER DEVELOPMENT OF .CCOUNT SWITCHING MEASURES ‘Timing: Your office requested beefing by 24 December 2009. ‘Recommendation: That you: ‘mote that an ASIC review an th implementation of the Account Switching Package (Gee Attachment A) fond tal awareness and take-up of tho package appears tobe low mad, __ that indusey could do more to promote awareness of tho eecvicn Ie Noted. Section 22 not relevant Sissi ‘KEY POINTS r Section 22 q not relevant L 4 — |, ASIC%s recent review of tho implementation of the iooount switching package fond ‘hat wit authorised depoe-taking nstiutions (ADIs) had implemented the services ts required from 1 November 2008 avareness and take-up ofthe services by consuinees ‘sppaars to below, primarily due to a lack of promotion by industry (Attachment A), r Section 22 a L, ‘not relevant a r 4 Exemption: Section 43(1)0) LExemption: Section 43(1)(b) “Additionally, confidential sualysis conducted by the RBA and the APCA shows that Australia already has «high rate of account chu ~ around 8 per cent per annum, which is broadly. ‘consistent with that observed in Buropean countries tht have implemented more ‘comprehensive account switching regimes. “The rate of eccount chum in Australias higher than expeienoed inthe UK (around 17.5 per cet) and the Netherlands (around 4.5 per cei), both of which have cenralised witching arangerenis in place, Globally, there iinet in ewitching given the general difficulties for consumers in changing their account aangements. ‘Notitestanding the sbove, we are planing op mecting with the Anstrlian Banking ‘Association (ABA) end major rogional banks in mid-Fenuary to diseus other options to ‘aclitate switching, inclding for credit cards and mortgages ‘Section 22 not relevantconan 2 {ie ASIC hotne prove ifematon cates who fl hat racial featation ‘snot en nnorig onsen pies lvenge ASICs ~ how theta sichng mesos we, ~ stra o webu such as Cenex whic ca ep people to compere ‘ancl pdt depending on hl spel nents nd potent ~ SER rmcim seta nine ean ~ how to eggs wheter tis wor switching morgeges including geneclifrmation (on the tips offers nd oss tht caster shot tke in acon and ~ whet ett can inpy wih hee reo the asl Onde Svs ro nt Oaetma Seca : ASIC is cured ho proceso enhancing its phone tne and web sit fo make these ‘more soceaible, ~ Wheres information sbour bank eccont sitcking perousy routed caller to select ‘ttoverall menuitem fo advice on financial ever and ann, tho tp love ment is ‘being enkaned to ocudo a specic mem ite for ‘ching bank’ and basking prods, ~ * lek acon benno ati IDO web te Syraog elon ea a ~ ASICs ete tte ney owl fa laton sce Sng cnet te ten peal al ena ASIC is investignting the potential to achiove u higher search engine ranking for the ‘logon nn swe eae tna inmate tessa orcas ASIC hes previoualy reviewed the implementation of tho interim Ting and switching "Wheres ASICs int review (Octobe 2008) oand tha al bas wer on tack to ‘plement te sevice, there was ow kop by connimess, ~ Sheep tng te nara schsenttgfetemie tet in ‘Treasury and ASIC wil bo examining thr ways to enhance he eating ensues, These may inside: ~ Deyaopmet faa enue marie ido govan ed ounaerseri Thrice anon ose ASIC reve o cs rpred no edaton dig uit sccm nh som tt fe Corea ‘te bikingsecr animate eae fr conor oavita boeen ia sHeconripENer—