A little-known credit card benefit offers consumers protection from financial loss.
The business failure of Kleenmaid has left 4500 customers who have placed deposits on $27 million for goods not delivered may get some relief, if they act quickly. You have only a 75 day window from the transaction to make a claim. Eftpos users are also protected.
It appears that Kleenmaid were trading whilst insolvent, not that this seems to worry companies these days.
But here's the good news. Any customer who paid using a credit card [or debit card ]can use their card issuer's chargeback facility to get a full refund. I knew having a credit card had to be useful for something, and I have used this fact myself when buying online and not getting what I paid for.
Chargeback covers services or goods that have been paid for but not supplied.
If it happens you must notify your card issuer, which will investigate the case.
When it is satisfied you are entitled to reverse the transaction, it will credit your account. Because the bank has to look into the matter, it can take a couple of weeks to get the money back. In the case of Kleenmaid there is not much to look into.
The card issuer will then chase the merchant's bank (called the acquiring bank, in payment system jargon) to recover that money. In the card-payment world, the acquiring bank stands behind its merchant customer and has to make good when the sale of goods or services already paid for does not proceed.
Card companies including Visa, Amex and Mastercard were also reported saying customers should be able to get their money back.
Any consumer whose transaction card carries a MasterCard or Visa logo has access to the scheme debit system as well as to Eftpos.
It gets tricky because access to the two systems is through the same card and the same point of sale terminal.
If you press "credit" when you make a payment you are using scheme debit; if you press "savings" or "cheque" you are using Eftpos. Consumers who use the scheme debit system get the same protection as users of MasterCard and Visa credit cards, including chargebacks.
As we said earlier, it's important to notify the card issuer if a chargeback is required quickly. In most cases customers have 75 days, after which the issuer will not reverse the transaction.
Chargebacks are not just for reversing transactions where the goods or services are not supplied. They are also used to correct duplicate billing, to fix a bank processing error or to deal with fraud in cases where customers did not authorise a purchase on their card.
So lodge your claim and good luck!
Thursday, April 30, 2009
Thursday, April 16, 2009
Debt relief' made easy for credit card users as more middle class earners declare bankruptcy
Middle class and high income earners are increasingly taking advantage of cheap and easy insolvencies to escape credit card debt and go bankrupt.
Australia is experiencing a boom in insolvency activity and Victoria is the epicentre of the debt crisis. In the three months to March 31 this year the number of consumer debt agreements entered into skyrocketed up by almost 40 per cent, compared with the same period last year. Bankruptcies were also up 16 per cent, with the vast majority of those being non-business related. Personal insolvency agreements, which are generally undertaken by higher income earners who cannot repay consumer debts, jumped up by more than 50 per cent off a low base. The Insolvency and Trustee Service Australia reports that total insolvency activity was up 18 per cent across the nation in the March quarter. But the Victorian statistics are particularly alarming with total insolvency activity up more than 22 per cent. Only Tasmania showed more growth than Victoria in the numbers of people who cannot repay their debts. Debt counsellors say bankruptcy is a relatively cheap and easy option for people who have lost their job and cannot repay their debts."Bankruptcy can be a pretty cheap option if there are no real assets and no capacity to pay," says John Beecroft, an insolvency specialist in South Yarra."We do the paperwork and send it off to the Insolvency and Trustee Service where it is basically a paper entry."
Digby Ross, the official receiver at ITSA, agrees that bankruptcy can be a cheap and easy option for debtors. "It is a fairly straightforward process," says Mr Ross."They have to prepare a one-page petition and a statement of affairs covering their creditors, any property they have, and their personal details."That is filed with us and when it is accepted the person is bankrupt.
There are no court appearances required."A bankrupt person is generally denied credit for three years. A permanent record of the bankruptcy is placed on the National Personal Insolvency Index, an electronic public register. John Beecroft from debt assist says there has been a noticeable change in the type of people asking for assistance in the past few months."When rates and fuel prices were high we were seeing lots of people from the outer suburbs, now we are seeing more from middle class suburbs and above. "People who have used their credit cards to buy shares and had a margin call is pretty common -- or property investments that have gone wrong," said Mr Beecroft. Bankruptcy is a common option for people losing their jobs, he says.
Australia is experiencing a boom in insolvency activity and Victoria is the epicentre of the debt crisis. In the three months to March 31 this year the number of consumer debt agreements entered into skyrocketed up by almost 40 per cent, compared with the same period last year. Bankruptcies were also up 16 per cent, with the vast majority of those being non-business related. Personal insolvency agreements, which are generally undertaken by higher income earners who cannot repay consumer debts, jumped up by more than 50 per cent off a low base. The Insolvency and Trustee Service Australia reports that total insolvency activity was up 18 per cent across the nation in the March quarter. But the Victorian statistics are particularly alarming with total insolvency activity up more than 22 per cent. Only Tasmania showed more growth than Victoria in the numbers of people who cannot repay their debts. Debt counsellors say bankruptcy is a relatively cheap and easy option for people who have lost their job and cannot repay their debts."Bankruptcy can be a pretty cheap option if there are no real assets and no capacity to pay," says John Beecroft, an insolvency specialist in South Yarra."We do the paperwork and send it off to the Insolvency and Trustee Service where it is basically a paper entry."
Digby Ross, the official receiver at ITSA, agrees that bankruptcy can be a cheap and easy option for debtors. "It is a fairly straightforward process," says Mr Ross."They have to prepare a one-page petition and a statement of affairs covering their creditors, any property they have, and their personal details."That is filed with us and when it is accepted the person is bankrupt.
There are no court appearances required."A bankrupt person is generally denied credit for three years. A permanent record of the bankruptcy is placed on the National Personal Insolvency Index, an electronic public register. John Beecroft from debt assist says there has been a noticeable change in the type of people asking for assistance in the past few months."When rates and fuel prices were high we were seeing lots of people from the outer suburbs, now we are seeing more from middle class suburbs and above. "People who have used their credit cards to buy shares and had a margin call is pretty common -- or property investments that have gone wrong," said Mr Beecroft. Bankruptcy is a common option for people losing their jobs, he says.
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