Electronic funds transfer transactions are regulated by the ePayments Code which is a voluntary code of practice, which is administered by the Australian Securities and Investments Commission. The Code sets out the obligations of businesses to consumers, consumer rights and responsibilities and what to do in the event of a complaint or dispute, most commonly, unauthorised transactions (see below).
The Code covers the following:
- ATM transactions
- EFTPOS (Electronic Funds Transfer at Point of Sale) purchases
- Purchasing of goods by credit card, either online or by phone (i.e. where signature not required)
- Mobile phone or internet banking
- Telephone banking
- Transactions using stored value facilities* (e.g. prepaid phone cards)
* A stored value facility is a service which allows consumers to put money into a device to allow purchases of goods or services (e.g. phone credit voucher for use with mobile phone).
All banks, credit unions and building societies offering electronic banking services to retail customers have signed up to the Code and are covered by it.
Further information about banking transactions including electronic banking is available from the Australian Securities & Investments Commission’s Moneysmart website.
One of the primary purposes of the Code is to determine who is liable in the event of an unauthorised transaction.
Situations in which money can be refunded as a result of an unauthorised transaction include:
- where there was fraudulent or negligent conduct on the part of employees of your account institution or of merchants;
- a forged, faulty, expired or cancelled card, PIN or password was used;
- a merchant incorrectly debited your account more than once for a sale;
- no PIN or password was required to conduct the transaction (except where you have acted fraudulently or contributed to your loss e.g. unreasonable delay in reporting lost card)
- it is clear that you haven’t contributed to the loss.
To minimise your liability it is important to advise your financial institution immediately if your card has been lost or stolen or if someone gains access to your PIN or password.
Situations in which money will not be refunded include:
- where you have acted fraudulently;
- not keeping your PIN or password secret;
- unreasonably delaying before advising your financial institution that your card has been misused, lost or stolen or that someone knows your PIN or password;
Even in these situations your liability will be limited to only the amount of your account’s daily transaction limit. Similarly, if the amount taken exceeds the balance of your account or your prearranged credit limit.
Where it cannot be determined whether or not you have contributed to the loss, there are limits on how much you will be responsible for. Liability in these cases will be limited to the lowest of the following:
- $150, or any other lower figure established by your financial institution; or
- the balance of the account(s) at the time of the transaction;
- the amount of money that had gone out of your account before you let your account institution know that your card had been lost or stolen or that someone else knew your PIN or password.
Complaints and disputes
In the event of a complaint or dispute with your bank or credit union, see Complaints against banking and financial services. You should always try to resolve the complaint first with the provider.
If your complaint is against a merchant for an unauthorised transaction, you need to go to your Bank or credit union to ask what to do, and you need to act quickly. There may be grounds for a chargeback to the merchant (which means you may be able to get your money back).
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.