Bank Account Closure

Australia's #1 for Law
Join 150,000 Australians every month. Ask a question, respond to a question and better understand the law today!
FREE - Join Now

Robert Agius

Member
28 February 2020
2
0
1
Are there any Cases where a bank closes an acoount with out reasons given?
I thought that it would be a breach of contract as the relationship would not exist without a contract of some sort.
 

Rob Legat - SBPL

Lawyer
LawTap Verified
16 February 2017
2,455
511
2,894
Gold Coast, Queensland
lawtap.com
Cases around closure of bank accounts? None that I know of. Incidences of banks closing accounts without giving reasons? Loads. All banks that I know have something similar to this written into their account terms (this is taken straight from CBA's terms at clause 6.4):

"We can close your account at any time after giving you reasonable notice."

There's no need for them to give a reason. Most banks (and all banks I've dealt with on this issue) refuse to give a reason, citing at best that it is a 'commercial decision'. I've seen banks decide to wholesale cease serving an entire industry (notably - Westpac). In these circumstances it generally comes without notice and involves them contacting a business and stating that all their trading accounts, cards, and other accounts for not only the business, but also directors and staff, will be called closed in XX days.

The Banking Code of Practice, in reference to account closure, specifically states (at clause 143): "We may close an account of yours under its terms and conditions if that account is in credit."

So - not a breach of contract. The ability to close an account is actually written into the contract.
 

Robert Agius

Member
28 February 2020
2
0
1
Thank you but I would have thought in the modern day law that a breach would occur if no reason given, There are recent cases re unilateral contracts that may be relevant.

I see where your advice is coming from and it is a strong argument.
 

Rod

Lawyer
LawTap Verified
27 May 2014
6,757
926
2,894
Why do you think unilateral contracts apply?

Why not look for unfair contract terms?