The New South Wales government-backed Consumer Credit Legal Centre has described the Commonwealth Bank as the worst offender in terms of irresponsible credit card lending, based on the cases it sees.
"Commonwealth Bank is over-represented on our case work for irresponsible lending relating to credit cards," the centre's principal solicitor Katherine Lane said.
"In other words we do more matters involving the Commonwealth Bank on irresponsible lending than any other bank." She said that of the cases the centre came across relating to irresponsible credit card lending, most involved unsolicited limit increases by CBA.
Ms Lane pointed to one recent case involving the bank, where a person who was on social security received a credit card limit increase to $27,000.
She also said that the centre's advice line was over-represented by CBA, with people calling in due to financial hardship or irresponsible lending claims.
"Commonwealth Bank is one of the banks that we see most of the financial hardship stuff ... and limit increases that could be argued to be irresponsible," she said.
A CBA spokesman said: "We take responsible lending very seriously and have policies in place to assist our customers to understand the circumstances when these offers are made. Our policies preclude lending to customers on a fixed income and our approval process takes into account customers' past repayment history and ability to repay.
"What that means is that no one will get an offer if they have defaulted in the past or missed a repayment ... they just won't get an offer.
"The people that get the offers have all had sound repayment histories and they have kept within the terms of their credit card."
The latest Reserve Bank of Australia statistics show that the nation's personal credit card debt is $35.6 billion.
Federal Treasurer Peter Costello met the head of the major banks last year and warned them against lowering their credit standards.
Ms Lane called on CBA to introduce a new code of conduct, similar to that of its rival, ANZ.
The CBA spokesman said that the bank had a hardship service area and that the bank met "everything that ANZ does -- the only thing that we've not done is put it in writing".The Australian.
Source: AAP
Thursday, March 29, 2007
Wednesday, March 28, 2007
Aussies slam credit card surcharges
Australian credit card holders are not happy about surcharges on credit card payments, with a NEWS.com.au survey showing many people are ditching plastic for cash payments to avoid such fees.
The survey of credit card holders has revealed 46 per cent had used another means of payment when asked to pay a surcharge.
When respondents were asked about alternative payments, the most commonly cited were BPay, cash and EFTPOS.
The survey of of 1678 people was carried out between February 12 and 20 in conjunction with online polling firm Coredata.
Being stung by higher interest rates? Have your say in our online property survey.
The survey comes in response to an increasing number of merchants using surcharges on credit card payments to recoup costs they incur in credit-card transactions.
In recent years, the RBA has removed restrictions on merchants applying surcharges to credit-card payments.
While some consmers still used credit cards when faced with a surcharge - many citing convenience as a reason - other people said they went to different merchants.
"I pulled up in a petrol station and there was a sign saying they charged a surcharge for credit cards, I then drove to the next station down the road that did not," said one respondent.
Consumers aren't happy about other fees associated with credit cards and a whopping 61 per cent of respondents had been stung by fees for either paying off their credit card too late or not paying the required amount.
Of those who had been hit with late fees, 56 per cent said they were a "rip off", another 23 per cent said they were not fair and 22 per cent said they wanted to close their account.
But some respondents admitted self-fault, with 31 per cent of late payers said they were "annoyed with themselves".
Not all consumers are fully informed about their plastic. Many respondents, or about 30 per cent, were not sure of the interest rate on their credit cards.
Fewer respondents (13 per cent) admitted to being unsure of the fees on their card.
But most people (87 per cent) knew how many interest-free days they had on their credit cards.
Of those surveyed, 90 per cent had a credit card and 62 per cent of credit-card holders made full payment on their cards each month.
Recent Reserve Bank of Australia statistics show that the nation's personal credit card debt is $35.6 billion.
Source: NEWS.com.au
The survey of credit card holders has revealed 46 per cent had used another means of payment when asked to pay a surcharge.
When respondents were asked about alternative payments, the most commonly cited were BPay, cash and EFTPOS.
The survey of of 1678 people was carried out between February 12 and 20 in conjunction with online polling firm Coredata.
Being stung by higher interest rates? Have your say in our online property survey.
The survey comes in response to an increasing number of merchants using surcharges on credit card payments to recoup costs they incur in credit-card transactions.
In recent years, the RBA has removed restrictions on merchants applying surcharges to credit-card payments.
While some consmers still used credit cards when faced with a surcharge - many citing convenience as a reason - other people said they went to different merchants.
"I pulled up in a petrol station and there was a sign saying they charged a surcharge for credit cards, I then drove to the next station down the road that did not," said one respondent.
Consumers aren't happy about other fees associated with credit cards and a whopping 61 per cent of respondents had been stung by fees for either paying off their credit card too late or not paying the required amount.
Of those who had been hit with late fees, 56 per cent said they were a "rip off", another 23 per cent said they were not fair and 22 per cent said they wanted to close their account.
But some respondents admitted self-fault, with 31 per cent of late payers said they were "annoyed with themselves".
Not all consumers are fully informed about their plastic. Many respondents, or about 30 per cent, were not sure of the interest rate on their credit cards.
Fewer respondents (13 per cent) admitted to being unsure of the fees on their card.
But most people (87 per cent) knew how many interest-free days they had on their credit cards.
Of those surveyed, 90 per cent had a credit card and 62 per cent of credit-card holders made full payment on their cards each month.
Recent Reserve Bank of Australia statistics show that the nation's personal credit card debt is $35.6 billion.
Source: NEWS.com.au
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