15 February 2018
Consumer group CHOICE has welcomed the Treasury Laws Amendment (Banking Measures No. 1) Bill 2017, which delivers a package of banking reforms including new legal protections for people who want to easily cancel their credit cards online.
The package of consumer protections will see banks:
- Banned from approaching people with unsolicited credit card limit increases;
- Provide an online option to cancel cards and reduce credit limits;
- Simplify the calculation of interest; and
- Implement tighter responsible lending obligations.
"For years, banks have been forcing consumers to jump through hoops when they try to cut ties with debt. Meanwhile, banks are offering online credit card approval under 60 seconds," says CHOICE CEO Alan Kirkland.
"CHOICE has been calling to abolish this blatant attempt to keep people attached to their credit card and debt since 2015.
"Too often banks have loaded up consumers with excessive credit limits without properly considering a person's ability to repay. This is made worse by banks requiring consumers to go through archaic offline processes in order to cancel or limit a credit card.
"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 are unable to cancel a card.
"Consumer groups brought these problems to the attention of banks years ago, but yet again the Federal Government has been required to step in and fix the problem. This is another example that demonstrates that banks can't be trusted to quickly self-regulate in customers' interests. This is why CHOICE is calling for the Royal Commission to explore cases where the banking sector has dragged its feet and delayed reform."
"From delaying action on excessive ATM fees, to lobbying to overturn the Future of Financial Advice reforms and attempting to prevent a Royal Commission, the banks deliberate strategy of inaction continues to harm consumers.
"We congratulate Parliament for doing what the banks have been reluctant to do themselves; make real changes that will reduce harm caused by credit card debt and benefit Australians," Mr Kirkland says.
To contribute to CHOICE's response to the Royal Commission go to: https://campaigns.choice.com.au/royalcommissionbanks/
Tom Godfrey, CHOICE Head of Media: 0430 172 669
Set up by consumers for consumers, CHOICE is the consumer advocate that provides Australians with information and advice, free from commercial bias. As vital today as when we were founded in 1959, CHOICE continues to fight for consumers and uncover the truth. By mobilising Australia's largest and loudest consumer movement, CHOICE fights to hold industry and government accountable and achieve real change on the issues that matter most.