Defined Terms and Documents       

ASIC is one of Australia's financial services regulators and provides at ASIC website - Our Role a lot of evidence to that effect

 

 

Australian Securities and Investments Commission webpage provides the following representations re ASIC's responsibilities to, amongst others, Credit Cardholders:

ASIC is Australia’s corporate, markets and financial services regulator.

The ASIC Act requires us to:
  • maintain, facilitate and improve the performance of the financial system and entities in it
  • promote confident and informed participation by investors and consumers in the financial system
  • administer the law effectively and with minimal procedural requirements
  • enforce and give effect to the law

The laws we administer give us the facilitative, regulatory and enforcement powers necessary for us to perform our role. These include the power to:

  • seek civil penalties from the courts

  • commence prosecutions – these are generally conducted by the Commonwealth Director of Public Prosecutions, although there are some categories of matters which we prosecute ourselves.

 

Below is a brief extract from Memorandum of Understanding - ASIC & APRA - 12 Oct 1998:

            `ASIC is responsible for .............. monitoring and promoting market integrity and consumer protection in relation to the Australian financial system, the provision of financial services and the payment system."

ASIC maintains a dedicated MoneySmart website which includes 'Credit cards - Understand how they work' which provides practical information as to how best manage Credit Card Products which includes ASIC MoneySmart - Credit card debt clock.

News Daily article "How predatory banks are hooking credit cards customers"

"In recent years ASIC has taken enforcement action against three credit card issuers – GE Money, Commonwealth Bank and Westpac – for breaches of responsible lending laws.  Both Commonwealth Bank and Westpac were caught sending unsolicited invitations to credit card customers to raise their debt limits.  Such marketing tactics were prohibited under responsible lending reforms introduced in 2012."

Submission in relation to the performance review of ASIC by Consumer Credit Legal Centre (NSW) Inc dated Oct 2013 noted the following action by ASIC with banks:

• 12-110MR Bankwest amends credit card advertising following ASIC action, Monday 4 June 20121213-1

• In March 2012 ASIC accepted an enforceable undertaking from the Commonwealth Bank in relation to a message sent to its internet banking customer which gave the misleading impression that they would miss out on the opportunity to consent to additional credit limit increases if they did not sign up now and they could not access additional credit in future if they did not consent. - 12-40MR ASIC accepts enforceable undertaking from Commonwealth Bank, Wednesday 7 March 2012 

• In April 2012 Westpac changed its messaging on this subject as a result of ASIC’s concerns that it was giving customers the misleading impression that they could not access additional credit without giving consent to receiving unsolicited credit limit increases, and that they needed to act fast or they might miss out. 12-79MR Westpac withdraws unsolicited credit card limit increase invitation in response to ASICs concerns, Tuesday 24 April 2012

• GE Money were the most recent to be caught out with ASIC commencing legal action against them in October 2013. ASIC alleges that GE represented to customers that they had to give GE Money consent to send them unsolicited credit limit increase offers before it would activate their credit card or give them a credit limit increase. 13-280MR ASIC takes civil action against GE Money, 17 October 2013

• 12–31MR American Express agrees to change credit card interest rate policy for defaulting cardholders, Friday 24 February 2012

The ASIC publication titled "Advertising financial products and services (including credit): Good practice guidance" dated Nov 2012 lists six 'guidance rulings' re credit cards under 'B Good practice guidance' from page 11.

Upon typing in the two words 'Credit Cards' in the 'Search' function on the ASIC website, reveals a lot of publications not limited to the following:

14-041MR Smart people not so smart with their money - ASIC  - 12 March 2014 notes:

  • Over half a million Australians carry more than $5,000 in credit card debt [1]. It may come as a surprise to know that it is often middle income earners, managers and degree qualified people who are most likely to carry $5,000 or more compared to the general population.

  • Research by Roy Morgan shows 22% of Australians over the age of 18 earn more than $70,000 per year, and these people make up 42% of those who carry credit card debt over $5,000.

  • 12% of the population are managers and managers make up 26% of those with debt above $5,000.

  • 42% of Australians have a degree or diploma they represent 49% of those carrying $5,000 or more in credit card debt.

  • Around 2 million Australians do not pay off their personal credit card debt in full each month, rising from 24% of personal credit card holders in 2009 to 27% of personal credit card holders in 2013 [3]. Australians have over $34 billion owing on credit cards where interest is being charged and pay $6.2 billion a year in interest [4].

ASIC Has Ignored Its Acknowledgement In 2010 That These Findings Have Implications For Our Regulatory Regime webpage notes in ASIC Report 224 "Access to financial advice in Australia" - Dec 2010 that ASIC has known, at least since Dec 2010, that:

 "7.9 million (53%) of Australians aged 15 to 74) had proficiency less than the minimum required for individuals to meet the complex demands of everyday life and work emerging in the knowledge-based economy‘ for document literacy and numeracy respectively‘ and that therefore "These findings have implications for our regulatory regime, which relies upon disclosure as a critical element of our consumer protection system."