29 March 2017
Sydney, 29 March 2017: The Australian Bankers’ Association has today reiterated its support for making it easier for customers to cancel credit cards.
A media release issued by Senator Katy Gallagher on 28 March contained misleading comments about the banking industry’s response to recommendations from the independent review of the Code of Banking Practice. It said:
‘Other recommendations of the independent review rejected or not agreed to in full by the ABA includes a clear recommendation to allow simple online cancellation of credit cards and calls to stop unsolicited offers to increase one’s credit card limit.’
ABA Executive Director – Retail Policy Diane Tate said the industry supported, in full, the recommendation1 in question from Mr Phil Khoury’s final report.
“Each bank will look at how they can make it easier for customers to cancel their credit card, whether that’s online or another way that takes less time and effort than the current process,” she said.
“Cancelling a credit card often also involves cancelling recurring payments which are set up through card schemes, so we have to work on marrying up the two processes so that customers aren’t left with debt accruing on a cancelled card.
“In terms of credit limits, the law states that customers have to choose to receive offers to increase their credit limit, therefore banks are not making ‘unsolicited’ offers to increase credit limits,” she said.
Contact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913
1Recommendation 26: The Code should be amended to include a new obligation that wherever there is functionality (electronic or otherwise) for a customer to alter a credit card limit, this must (equally and as prominently) include the ability to reduce the credit limit or to cancel a Code customer’s credit card.
“…banks can go back to their normal processes and that is working out what’s right for every single customer, on an individual tailored basis with a proper assessment. That is the best thing for the customer.”
Access to credit opens up opportunities and fulfills aspirations. Getting it right requires the right balance between consumer protections and the flow of credit.
Interviewed by AM’s Peter Ryan, ABA CEO Anna Bligh talked about the substantial drop in loan deferrals since their peak during the pandemic, falling from 900,000 to 300,000.