02 March 2017
Consumer group CHOICE is turning up the heat on the big four banks following its latest review of credit card cancellation policies which found consumers still have to call or write to the banks when trying to exit toxic credit products.
"In the age of online banking it defies belief that ANZ, NAB, Westpac and Commonwealth all require you to call or email them when seeking to cancel a credit card," says CHOICE's Head of Campaigns & Policy Erin Turner.
"Not only do they not let you cancel your card online, ANZ also requires you to cut the card diagonally and post it back to them. In our view this is clearly a 'go slow' by the banks to allow them to extract more fees and sell you more poor value products.
"The banks have had long enough to address this issue. It's time the Federal Government step in and introduce legislation requiring these financial institutions to offer online cancellation options to customers," Ms Turner says.
CHOICE's review comes as the banks are set to face a Parliamentary Inquiry on Friday this week and follows attempts by ANZ and Westpac to see off credit card criticism by indicating they will cut interest rates on some "low rate" cards.
"Although some of the banks might point to the changes they've made to just two credit card products in recent weeks, it's little more than a tokenistic gesture when you consider the systems they've built to trap people into high-cost debt for as long as possible," Ms Turner says.
"We first raised our concerns about the banks credit card cancelation policies in 2015, yet despite this and the Federal Government support for change last year, the situation remains exactly the same.
"It seems clear that the big banks' 'go slow' on card cancellations is about protecting revenue from interest and fees, with data showing the big banks slug consumers with an average annual fee of $146 compared to just $58 through a mutual or customer owned banks.
"Unfortunately, getting stuck paying excessive credit card interest is only one of the traps consumers face, with many of us paying excessive annual fees when we fail to cancel a card," Ms Turner says
Media contact: Tom Godfrey, CHOICE, Head of Media and Spokesperson: 0430 172 669
Banks go slow
- August 2015 – CHOICE identified the cancellation trap for credit cards.
- May 2016 – The Treasurer announced reforms to require banks to offer online credit card cancellation .
- March 2017 – Still no action form the banks.