So who do you believe the ABA or Katy Gallagher??Senator calls out ABA over ‘tricky’ charges
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- 1 Day ago
Senator Katy Gallagher says the Australian Bankers Association’s (ABA) rejection of key recommendations of the Khoury Review will hurt banking customers by retaining unfair practices.
She called on the major banks to stop “tricky” interest charging and commit to allowing the online cancellation of credit cards.
“In his review, Mr Khoury said that charging interest on a portion of a credit card balance that has been paid on time
is ‘unacceptable’ and must be prohibited,” said Gallagher.
“It is substantively unfair in applying interest and (if understood) would be perceived by customers as just plain ‘tricky’ (page 83, Independent Review - Code of Banking Practice).”
Other recommendations of the independent review rejected or not agreed to in full by the ABA includes a clear recommendation to allow simple online cancellation of credit cards and calls to stop unsolicited offers to increase one’s credit card limit.
“Almost a year ago Malcolm Turnbull promised to act on credit card reform, including these three recommendations but has not been able to deliver these much needed reforms,” said Gallagher.
“For way too long banking customers have been ripped off when it comes to credit cards. Hidden charging, high interest rates, high annual fees, expensive rewards programs, exorbitant late payment fees and inappropriate lending practices have resulted in customers being slugged unfairly whilst the banks make millions in credit card profits.”
ABA responds
However, the ABA last week reiterated its support for making it easier for customers to cancel credit cards,
describing Senator Gallagher’s comments as “misleading”.
ABA executive director – Retail Policy, Diane Tate, said the industry supported, in full, the recommendation in question from Khoury’s final report.
“Each bank will look at how they can make it easier for customers to cancel their credit card, whether that’s online or another way that takes less time and effort than the current process,” she said.
“Cancelling a credit card often also involves cancelling recurring payments which are set up through card schemes, so we have to work on marrying up the two processes so that customers aren’t left with debt accruing on a cancelled card.
“In terms of credit limits, the law states that customers have to choose to receive offers to increase their credit limit, therefore banks are not making ‘unsolicited’ offers to increase credit limits.”