Lesson Learned: joint signatory in bank

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Forums › Finance and wealth management › Lesson Learned: joint signatory in bank

nunz

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#208076 25-Jan-2017 19:52

Just got a final confirmation from the banking ombudsman today;

If you are a joint signatory on an account (including business accounts), the other party(s) can remove you from the bank account and the bank has no obligation to inform you of this event.

That's it - straight forward and simple. You have no expectation of being notified if your access to your account changes.

So - if you are in the situation - don't assume you are safe.

The nasty back twist - if you are in a two person, joint signatory situation, then because after your removal the signatory is changed to single person, then you have no legal recourse to be added back - other than straight out litigation or criminal complaint.

mattwnz

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#1709595 25-Jan-2017 20:14

You would think both parties would need to give permission. Weird.

Lias

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#1709616 25-Jan-2017 21:01

It seems ridiculous that both signatories or proof of death are not required.

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Geese

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#1709810 26-Jan-2017 09:42

Happened to me. Got home one day, "you've been having an affair, get out of my house you piece of work". Of course there was no affair or any reason to suspect it, however I was surprised I was simply removed from the joint mortgage. I never had to go see the bank or sign anything.

chiefie

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#1709820 26-Jan-2017 09:46

Wow... this can happen??

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sen8or

1789 posts

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#1709892 26-Jan-2017 10:52

you would have to wonder if by extension to that ruling, that liability is also removed?

I can understand that with a joint account either party has the right to transact on the account (except where joint signatures are required) so it stands to reason that either party could remove the other from the account, but what if that account had an overdraft. By the actions of party a removing party b, does party b no longer have any liability for the overdraft (or mortgage or loan or whatever)?

michaelmurfy

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#1709943 26-Jan-2017 11:59

Disclaimer: I work for a bank. Mandate is a bank term for the list of signatories.

The signatories can be set to "2 to sign" for everything including a change of signatories. This depends on how the signatories are set up, sometimes they'll be set up for 2 to sign for withdrawls however just a single signatory for changes to the mandate depending on the customers needs.

For example. A business wants to list people on the account - they'll normally do something like this:
Withdrawls, Transfers - 1 to sign.
Changes, account opening / closing / change of mandate: 2 to sign alongside listed director(s).

If somebody phones up saying "xx has passed away" we have to take their word for it and take a notification of death - normally people are not stupid enough to do a notification of death for somebody who is still alive. For relationship disputes blocks are normally placed on an account until both parties sort it out with the bank in a branch.

The bank doesn't have to notify all signatories on the mandate of a mandate change but the mandate should be set up in a way that most signatories have to have their say of a change (the bank does have to abide by the customers need here). Technically, the bank is the third party here.

Rule of thumb - if you've got a joint account with your significat other ensure it is 2 to sign for account opening / closing and changes to both the mandate and account. If anything goes wrong in the relationship be sure to phone your bank and log a relationship dispute and don't be a dick by transferring the money before you do this - keep it clean as this means both parties need to sort out with the bank what happens with the payments, mortgage etc before their accounts are unblocked / seperated so it is often the cleanest way to ensure you've got your say.

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BlinkyBill

1443 posts

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#1709954 26-Jan-2017 12:15

I was a joint signatory to a set of accounts. The other signatory was unable to act, due to serious illness, and due to the mandated two signatory rule I was unable to manage the accounts (I could transact, but not manage). I was required, by Westpac, to use my Power of Attorney authority to act on behalf of the second person. Westpac required me to lodge a copy of the PoA into their system, for each account. They were very professional and helpful in the circumstances; but they did act to ensure the interests of the second signatory were protected.

To be honest I did forget we set up the joint accounts according to the two signatory rule and was a bit surprised to learn I couldn't make changes without the second signature. Not a big deal, but I had forgotten.