Financial services

11.30 While children generally do not have access to large amounts of money, many teenagers earn wages from part time employment. A significant number of young people aged over 16 are in full time employment and need access to the full range of banking services. Young people participating in the focus groups told us of difficulties in opening bank accounts because of identification requirements. In some cases parents had to open an account on the child’s behalf.^[56] In addition, independent young people often have difficulty obtaining credit.

11.31 The Inquiry considers it important that the national child consumer strategies include general information on the way banks operate and how to access their services.^[57] This material should also include information about available complaints mechanisms.

11.32 Various ‘watchdog’ or regulatory bodies have been established to oversee consumer banking and finance services. For example, the Australian Banking Industry Ombudsman Scheme was set up in 1990 to help individual customers resolve complaints with their banks, usually through processes of investigation, discussions with the bank and conciliation.^[58]

11.33 The Banking Industry Ombudsman does not keep statistics on the number of complaints made by or on behalf of people under 18 years of age. Anecdotal evidence suggests they are under-represented as complainants. Given the level of concern about financial services expressed by young people in our focus groups, the Inquiry considers that information about the services offered by the Banking Industry Ombudsman should be included in the national child consumer education strategies proposed at recommendation 51.

11.34 The Consumer Affairs Division of the Department of Industry, Science and Tourism administers a Financial Counselling Program that provides free financial advice to people who may be disadvantaged by socio-economic status or geographic location.^[59] Internal research indicates that approximately 10–15% of the Program’s clients are under 25 years of age although few are under 18. The program should be publicised through the national child consumer education strategies proposed at recommendation 51.

11.35 The Wallis Inquiry into the Australian Financial System recently recommended the creation of a new agency, the Australian Corporations and Financial Services Commission, to provide federal regulation of the finance sector including consumer protection.^[60] The federal Government is committed to this reform.^[61] When it is established, the Australian Corporations and Financial Services Commission should have regard to the specific needs of child consumers in the banking industry when developing complaints lodging and handling procedures.