20th Dec 2017

Fees, credit card offers at heart of new banking code of conduct

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Crackdown on credit card offers

Credit card rules and more transparent fees are at the heart of an overhaul of the banking industry’s code of practice that will result in “a more prominent commitment to ethical behaviour”.

With public trust in the sector at a historic low following a series of scandals and the announcement of a royal commission into the finance sector, the Australian Bankers Association (ABA) has lodged the restructured code with the Australian Securities and Investments Commission (ASIC). It is expected to be implemented within 12 months.

The changes – a reaction to concerns about rising household debt through easy access to credit – ban unsolicited offers of card limit increases and give customers the power to cancel their cards online.

Australians owe about $32 billion on credit cards – an average of around $4200 per card-holder.



ABA Chief Executive Anna Bligh said on ABC Radio that the code of conduct overhaul showed banks were serious about change.

She said: "Banks are committed to change and the new code is stronger, broader and written in simple to understand language.

"It has been completely rewritten to better meet community expectations and service the needs of customers.”

The ABA is also pushing its 24 members – the ‘Big Four’ plus regional, community and foreign banks – to make unpopular transaction fees more transparent and small business contracts to be written in plain English.

Ms Bligh said ABA members had accepted 96 of the 99 recommendations presented to them and were committed to what she described as the biggest shake-up of the industry in more than 20 years.

The new code will be a legally binding contract between banks and customers and its implementation will be monitored by the independent Banking Code of Compliance Committee.

The previous code was voluntary but enforceable where ABA members had agreed to sign up; the new code will be mandatory.

"The new set of rules and behaviours will go a long way in addressing the expectations that Australians have of their banks,” Ms Bligh said.

"Banks most certainly do not underestimate the challenge ahead of them and will continue to make necessary changes."

In other changes to the code, customers will be:

  • notified before an introductory interest-free period expires;
  • informed when a bank reports a payment default on a loan to a credit reporting body;
  • provided with a list of direct debits that come off cards to better inform customers about their commitments.

 

Has your trust in banks been eroded? What other changes would you like to see?

 


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COMMENTS

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Ted
21st Dec 2017
10:48am
After listening to the Small business Ombudsman this morning it seems that really nothing has changed. The banks are to appoint the members of their watchdog and are then obliged to only accept what they consider as ‘reasonable’ recommendations. Who defines ‘reasonable’? Why the banks or course?

ther are a few good things in this code but much of it is window dressing.
Bonny
22nd Dec 2017
6:41am
Of cause it is acceptable to only accept reasonable recommendations. Would you think that a recommendation to allow only Muslem women to use the bank at certain times to be reasonable? Or one can only pay off credit cards during the hours of 10pm and 11pm each day as reasonable?
Old Man
21st Dec 2017
11:30am
Of course banks are willing to change and if you look out of the window you may see that all the pigs have been fed and are ready to fly. There is a panic amongst the banks now that a Royal Commission has been announced and we can expect those complaints that have been made by thousands of depositors and borrowers are going to be dealt with. Banks will want to appear to be doing something favourable to customers so that when they are told that they have not gone far enough they can claim that at least they have tried. Watch this space for further announcements from the banks.
Hairy
21st Dec 2017
11:47am
Banks have been ripping their customers off for years.i personally don’t believe anything will change , they will just find another way to extract your $.All they are doing right now is throwing a little change in to the pot to confuse everyone but rest assured the rip offs will continue .you really would think that 21st century would be honest and law abiding .but if the elected goverment is not honest and rorts the system how can they force anyone else to be honest
Bonny
22nd Dec 2017
6:45am
I have not as yet been ripped off by any bank. Most people fail to read the terms and conditions and thus don't know the rules. Banking like the game of snakes and ladders is not all good and the snakes will get you if you don't play by the rules. Yes that's right you have ripped yourself off by ignorance.
OnlyGenuineRainey
23rd Dec 2017
2:01pm
The courts disagree, Bonny. Even the banks disagree and admit to ripping innocent people off. If you haven't been ripped off, it's more due to good luck than good management, so stop gloating and blaming others for their problems. There are crooks in the real world, and there are people who abuse their power to disadvantage others. And all the care in the world doesn't necessarily protect some from becoming a victim.
Bonny
26th Dec 2017
2:08pm
No such thing as good luck so I'd call it good management and reading the rules.

There are also 2 sides to any so called victims story and most need to be taken with a grain if salt as people like to blame others for their own mistakes. What better than blame a bank as you forgot to pay a bill a d suffered the consequences. I've seen it happen many times and I can't remember it ever being the banks fault. Most banks will rectify things very quickly with most of the time the customer is wrong as it's good for their PR.
ex PS
27th Dec 2017
9:55am
Bonny, even some of the most successful business people will tell us that success is due to a certain amount of good luck. Sometimes it is as simple as having the good luck to come across a Banker who has a little bit of an Ethical nature in their business dealings.
My son is in finance, and I have seen him shift positions many times because of conflicts between himself and his boss over ethics in the business place. There is a bid difference between what is legal and what is ethical.
And by the way, my son is doing quite well with his ethical stance, when he moves, he often finds that his clients seek him out and move with him. He will not work for banks as he says he knows how they treat their customers.
Old Geezer
27th Dec 2017
7:02pm
Haven't you noticed that the people who have the most so called good luck tend their chicken s better than anyone else does? That's right it is good management not good luck. You son is seeing the fruits careful tendering of his chickens.
john
21st Dec 2017
11:58am
Today is the 21/12/2017, and I read where the banks are introducing different tighter rules to control how ban ks behave and treat their customers , those customers whose money is used by the bank to invest and make more money, see it not their money ever , its OUR money.
So whats been going on for the last decade or two.?
I understand any one with super has investments happening in their favour through banking etc.
But when banks go way way over the top , like my bank has, with my family, and every corner is ruled by small print and "your trust" in that bank, and what the individual behind the desk tells you , well don't just hammer the big four, the smaller guys are just as dangerous . Just as dangerous.
And Ted of course most of it is window dressing. Unfortunately right now , we all look upon these institutions more like crime families than banks.

They are the peadophiles of finance.

And its time they were investigated just like the church has been, and further action taken.
Not all are bad like that, but too many Banks are seeing the fees rip off, the trickery of interest rates by misinformation and naive borrowers, as the normal procedure.

They can make no excuse to someone like me, I've just seen their trickery.
Bonny
22nd Dec 2017
6:48am
There is no trickery as there rules are all in their terms and conditions. You don't drive a car without knowing the road rules so don't use a bank without knowing the banking rules.
Beeman
21st Dec 2017
12:02pm
The ASX sector known as "Financials", which contains the banks and the insurance companies should be renamed "Organized Crime"
Bonny
22nd Dec 2017
6:50am
Easy just don't use them self insure and get your own banking licence instead.
Old Geezer
21st Dec 2017
12:59pm
Love credit cards and if used to their advantage they are save a person a lot of money. Unfortunately the majority of people misuse them to buy stuff they don't need and can't afford. If everyone used them like me they would have gone the way of dinosaurs decades ago.
Knows-a-lot
21st Dec 2017
1:15pm
I use a Mastercard Debit Card. If the money isn't in the account, then the transaction doesn't happen. Simple really.
Old Geezer
21st Dec 2017
1:31pm
I use a Visa and MasterCard Credit Cards using their credit up to their limit and sometimes beyond. Yes they let you go over the limit. Gets lots of points, free travel insurance and other insurances. If I buy something and I don't get the benefit of having it I get the money refunded. If it breaks or I lose whatever I buy in the first six months I also get the money refunded. Man this is far better than using cash.
ex PS
22nd Dec 2017
9:46am
Of course they let you go over your limit, they then get to charge interest on the whole balance. Banks love people like you, it is how they make a profit.
I have had Credit Cards for twenty years and have never paid one cent in interest, that is how you benefit from a Credit Card, if you are paying interest, you are letting the card run you, you are not running the card.
Loyalty points are great, but f you are spending money just to get them, again, our are being run by the bank you are not running it.
Old Geezer
22nd Dec 2017
2:26pm
No I've never paid a cent in interest either and never paid an annual fee on any of my credit cards. They are my slaves to save me worrying about getting cash, paying for my groceries and other bills and reward me with lots of goodies. The loyalty points are the icing on the cake as far as I am concerned.

I'm still trying to work out how banks at making money out of me using my credit cards as I'm certainly not paying them anything extra for using them.
OnlyGenuineRainey
23rd Dec 2017
2:04pm
The merchant pays a percentage of every transaction, and adds the cost to the price of goods, so you ARE paying, OG. We are ALL paying for the convenience.
Old Geezer
27th Dec 2017
6:42pm
Yes the merchant pays and I get the rewards. So it's a fool who doesn't use a credit card as they are missing out of some awesome rewards.
Knows-a-lot
21st Dec 2017
1:13pm
Banks will remain the total bastards everybody knows they already are. The royal Commission needs real teeth to enforce positive change.
Bonny
22nd Dec 2017
6:52am
The banks are like my slaves I treat them well and they help deliver me my income every year.
ex PS
22nd Dec 2017
9:50am
Under this government, I wouldn't thinks so, Malcolm will need a job after the next election. You can be sure the the commission will be defanged.
Old Geezer
22nd Dec 2017
10:33am
Well the former premier of NSW couldn't hand his premiership in soon enough to take multimillion job with the NAB.
Rae
24th Dec 2017
9:35am
Only because he'd already sold everything he agreed to and wasn't prepared to touch the water privatisation. He did set up for it though by sacking elected representatives and allowing water assets to be separated from council rates as separate entities with separate billing arrangements.

It is a pity the asset sales were not transparent where we could see which banks made fees from deals or loaned for purchase.

Several politicians recently appear to have been placed in position purely to facilitate privatisations and trade agreements. They did their job and then were rewarded.
floss
21st Dec 2017
2:36pm
Just another Turnbull attempt at window dressing, about all he is good at.
Anonymous
21st Dec 2017
4:20pm
yes - turnbull is single handedly responsible for global warming, WW2, the cuban missile crisis, the forest fires in california, and north korean nuclear missiles
have i left anything out floss?
AutumnOz
21st Dec 2017
4:29pm
Raphael, you forgot the Korean War and Vietnam, the hole in the ozone layer and a million and one other items.
Anonymous
21st Dec 2017
4:47pm
thanks Autumn \
btw youre in the wrong hemisphere - its bloody summer in Oz
Bonny
22nd Dec 2017
6:36am
Next you will be blaming him for your dirty underwear.
ex PS
22nd Dec 2017
9:38am
You finally got it Raphael, I might let you into my LEFTY CLUB, but as all good capitalist lackeys will tell you, all the problems in this country go back to the ALP, isn't that what the government will have us believe?
Anonymous
22nd Dec 2017
3:33pm
Cmon exPS
Don’t need the government to tell us .
Any intelligent person knows AlP will say and do anything for votes including selling out the country and bankrupting it

21st Dec 2017
4:16pm
That's right - blame the banks for your own stupid decisions.
Are people so dumb that the banks have to be forced to spoonfeed them with information that customers already have at their fingertips.
What a load of bull
Old Geezer
21st Dec 2017
5:34pm
I agree people are just being spoon fed due to their own stupidity.

I can never understand why people use credit cards so badly as they are such an awesome slave to those who use them and get all the benefits that come with them.

Booked us free return flight in January thanks to just using one of my card cards.
inextratime
21st Dec 2017
5:12pm
Raphael, I think I know where the bull comes from. But don't let that stand in the way of grandstanding and being supercilious.
Old Geezer
21st Dec 2017
5:37pm
Yes I know where the bull comes from. People looking for someone else to blame for their own stupidity. That's right I stuffed us so I'll blame the bank as I couldn't resist spending money on something I didn't need for something I can't afford. Why not just blame your own lack of self control instead? Oh no I'm the victim here as you just should not allowed me to have such a card.
Anonymous
21st Dec 2017
6:00pm
what OG said
Boof
21st Dec 2017
5:49pm
That 's the first thing I've read, where you've got it right. Old Geezer. Be careful or you'll be edted. On this site. U may updet someone. They don't like the truth here.
Old Geezer
21st Dec 2017
5:51pm
Yes the truth seems very alien here.

It's funny you know people may look at me like I have 2 heads etc but who really cares when you know you having a winning formula and they don't.
Watto
21st Dec 2017
9:48pm
have i left anything out floss? Yes Raphael I would like to know if Turnbull was anywhere near Dealey Plaza on Nov 22 1963
Bonny
22nd Dec 2017
6:35am
Gosh if he was he would have only been just 9 years old so I doubt if he could remember it.
Anonymous
22nd Dec 2017
3:30pm
No Watto - can’t pin this on Turnbull
Although his dad did post a pic of young Malcolm dressed in cowboy outfit shooting at Tv while watching the Kennedy cavalcade


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