CHOICE is warning people with Velocity Global Wallet accounts of a big change in the travel money card's terms and conditions.
In February 2021, the name of the card changed to just Global Wallet and was no longer connected with Virgin's Velocity Frequent Flyer program.
CHOICE has discovered that from April 2021, any Global Wallet account with no transactions for 30 days will be charged 1.5% of the available balance every week.
Previously, the inactivity fees for the Velocity Global Wallet card were 0.5% of the account balance, charged monthly if you didn't use the card for a year.
"CHOICE crunched the numbers and found someone with a $1000 balance on a Global Wallet product would have been charged $30 for no activity over six months before April 2021, after April the charge would be $325. In short, cardholders can be charged more than ten times more in inactivity fees," says CHOICE investigative journalist, Andy Kollmorgen.
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"This has come as a huge shock to the Velocity Global Wallet customers that CHOICE has heard from. Customers have had big withdrawals from their accounts that they didn't see coming," says Kollmorgen.
"The customers that have contacted us say that amounts totalling as much as $500 were taken from their account without their knowledge or consent," says Kollmorgen.
"Card issuer Cuscal says it gave fair warning, but all they did was send through a confusing series of supplemental product disclosure statements. Recipients would have had to read down to the bottom of the final communication in March to discover that the inactivity fees would take a huge leap in April."
Under financial services laws, companies have to give customers notice of increases in fees or charges 30 days before they take effect. And while card issuer Cuscal claims to have done this, the notice must also clearly explain the nature and effect of the change to the account holder.
"CHOICE is really concerned that customers are telling us these fees have jumped so significantly, without any kind of clear advance notice of the change. We will be notifying the financial regulator, ASIC, to ensure that the card issuer, Cuscal, has followed the law," says Kollmorgen.
"We want to see Cuscal review its practices and make sure that it has given all customers fair notice of any fee changes. If Cuscal hasn't thoroughly given this notice to Global Wallet customers, they should refund their fees in full."
If you're a Velocity Global wallet customer and you want to avoid the inactivity fee, there are three things you can do:
1. Use the Global Wallet card to make purchases within Australia every 30 days.
2. Withdraw any remaining funds on the card.
3. Transfer the balance to an Australian bank account.
If you've lost money and want to get it back:
- Call Velocity Global Wallet on 13 18 75 (or +61 2 8667 5924 if you are outside Australia) and request that your inactivity fee charges be reimbursed.
- If the card issuer refuses to refund your money, file a complaint first with Cuscal, then with the Australian Financial Complaints Authority on the basis of not having been properly notified about the change in inactivity fees.
Read the full story here: https://www.choice.com.au/money/credit-cards-and-loans/credit-cards/articles/velocity-global-wallet-inactivity-fees
Media contact: Katelyn Cameron, 0430 172 669, firstname.lastname@example.org