Parents are being warned to be careful about how they set up their children's bank accounts after some complained their children or former spouse could access money they shouldn't have.
The Banking Ombudsman Scheme has released a guide on children's bank accounts to help people understand who owns the money and what happens if things go wrong.
It says the most common complaints it receives about children's accounts are over who controls or has access to accounts.
In one case, a mother and her son opened an account together but the mother believed she and her son had to sign for withdrawals.
The son withdrew $1400 and bought a car which he wrote off in an accident.
The mother complained to that bank that it had given her son access to the account without her permission.
The bank didn't think it had done anything wrong but offered her $600 in compensation as a goodwill gesture.
She wasn't happy and complained to the scheme but after looking at the account mandate the Banking Ombudsman found the son was able to withdraw funds on his own.
In another case two parents set up an account in the name of their children and after separating, deposited $12,000 in each account for joint use for the children.
But one parent withdrew the money, and the other complained about it to the scheme.
The Banking Ombudsman could not uphold the complaint because the accounts' documents allowed each parent to manage the account individually.
The guide said parents could avoid problems with a bit of planning by making sure they check an account's mandate when setting up the account.
The account mandate spells out who has access to the account and how that will work.
The guide says parents may decide they alone will have access or may operate the account jointly with the child or give the child sole access.
"Understanding clearly who has signing authority is vital to avoid a child or parent operating an account [or spending the funds in it] in a way that is contrary to everyone's expectations at the time the account was opened.''
