ACA warns on banks’ fine print
18/07/2002
http://www.infochoice.com.au/home-loans/news/aca-warns-on-banks-fine-print/20550/2/16
Banks and finance companies are inserting unfair conditions into their contracts, according to the Australian Consumers' Association submission to the Trade Practices Act review. The practice shifts the risk unfairly onto the consumer, the Association claims. In its submission, the ACA accuses several companies of placing unfair conditions on the purchaser of goods and services, and names St George Bank, the Commonwealth Bank, GE Capital Finance and Colonial State Bank, amongst others. If Colonial State Bank mortgage holders don't pay their Colonial credit cards on time, for example, the loan contract states that the borrower is in default on his or her mortgage loan. And banks and other lending institutions often have clauses in their contracts stating that they may change the loan conditions at any time. The ACA said that there is no specific blanket law to stop companies from inserting these sorts of conditions into their contracts, and it has called for the Trade Practices Act to be changed to outlaw such practices.
15/07/2002
The Victorian Government will introduce new guidelines and tighter controls to regulate the debt collection industry. Consumer Affairs Minister, Christine Campbell, said there has been a rash of consumer complaints and several debt collection agencies are under investigation for the methods they use. The number of incidents involving collection attempts based on inaccurate data is increasing, Ms Campbell said. Debtors and consumer advocacy services have reported incidents of collection agencies attempting to collect debts that have been previously paid, failing to provide proof of debt, collection of debts that have legally expired, misleading consumers and ignoring requests that contact be made through a solicitor or financial counsellor. Banks and finance companies are increasingly handing their debt collection activities to large external companies. Ms Campbell said she's concerned that the most vulnerable people are at the mercy of these firms. But consumers must be aware of their obligations, she stated. They should not ignore notices from collection agencies or courts, but respond quickly by seeking advice, indicating whether the claim is accurate or not, or arrange payment terms. If people don't act quickly it can lead to further claims for payment and compounding debt. The Consumer Credit Legal Service said that many companies are "selling" their debts to other companies. Behaviour by some of these firms goes beyond "undue harassment" but is not covered by the legislation, the service said. Many consumer complaints relate to the agencies ignoring claims that the money is not owed.
ACCC wins support of small business
12/07/2002
The Fair Trading Coalition, made up of 14 small business groups, will today call for greater policing powers for the ACCC and reforms allowing small businesses to bargain collectively when dealing with large suppliers. The submission will be presented to the Dawson enquiry into competition law today and places small business squarely at odds with big business, which earlier this week called for curbs on the ACCC's powers. Amongst the elements of the FTC's submission are a call for the ACCC to be permitted to issue "cease and desist" orders; changes to the Trade Practices Act, making it easier for the ACCC to win court cases against large companies misusing market power; and the creation of a second small business commissioner at the ACCC. However, the FTC strongly opposes the Business Council's call that criminal sanctions for collusion should apply equally across big and small business, and to trade union officials, instead backing the ACCC's reform model which stipulates that jail terms for executives would only apply when companies have more than 1,000 employees or annual gross revenue exceeds $100 million.
Minister wants SME bank fees inquiry
03/07/2002
The NSW Minister for Small Business, Sandra Nori, says she intends to push for an inquiry by the ACCC into bank fees levied on small business when Australia's small business ministers meet today. Ms Nori claims that small businesses are subsidising large companies, particularly in areas like merchant service fees. If an inquiry is to be carried out by the ACCC, it will have to be referred by the Federal Government through the Small Business Minister, Joe Hockey. However, he has not made any commitment to such an inquiry to date. Figures released recently indicate that in 2001 small businesses paid a record $2.6 billion in bank fees, up from $1.5 billion in 1997. Ms Nori said that in merchant fees alone, banks are collecting triple the fees that big business pays. However, the Australian Bankers' Association rejected Ms Nori's claims, with its CEO David Bell describing her statements as "absurd". Mr Bell said that a minister should be more responsible and look at the whole situation. She's only painting part of the picture, he said, as her figures don't take into account an increase in the volume of business. He added that bank fees have been offset by recent decreases in lending margins also. The average merchant service fee is declining - I'm pretty sure of that, Mr Bell stated.