Defined Terms and Documents    

RBA Has Greater Obligations Than The Bank of England Or The US Fed. Reserve -  "The Reserve Bank is the principal regulator of the payments system through the PSB" 

RBA Has NOT Recognised Vulnerable Credit Cardholders as identified by the Productivity Commission and the ABS in Chapter 1

Reserve Bank has explicit 'Responsibilities/Obligations' to "the economic prosperity and welfare of (ALL) the people of Australia" that the Bank of England and the US Fed. Reserve do not hold carriage.  The UK Credit Card Regulator, BIS, overtly recognised in three published reports protecting "the most vulnerable in society" in implementing 'Five New Rights' for UK Credit Cardholders - effective 31 Dec 2010

Reserve Bank's Copious Publications on Credit Cards are bereft of any mention whatsoever of protecting "vulnerable consumers" or "at risk consumers" - not on the RBA radar, whereas the UK regulator, BIS, regularly makes specific mention of providing "real help for vulnerable consumers" (and similar) in its three published reports of 2009 and 2010

Does the Reserve Bank consider that all Credit Cardholders possess the same Numeracy and Literacy Capacity? 

Or does it assume 'caveat emptor'?  As noted in 'Proponents in Australia that ........' (further below), other contributing Australian interested parties have recognised the need to protect 'vulnerable consumers', but not the RBA

Productivity Commission and ABS have published several detailed reports about the divergent Numeracy and Literacy Capacity across the Australian population (Chapter 1)

Reserve Bank's Copious Publications on Credit Cards (over the last 10+ years) fail to recognise/comment on 'vulnerable' or 'at risk' Credit Cardholders (with only low Financial Literacy Capacity) which constitutes breach of its Statutory Duty and Fiduciary Duty to Persistent Revolvers

Joint Media Release "Getting a Better Deal on Credit Cards and Mortgages" issued on 5 July 2011 evidences that RBA plagiarized (from UK BIS) the metaphor "Getting a Better Deal" - first used in BIS report (to the UK Parliament) dated 5 July 2009 titled "A Better Deal for Consumers - Delivering Real Help Now and Change for the Future" - 18 months slower than the UK Regulator

Reserve Bank's webpage 'Credit Cards Regulatory Decisions' evidences that the Reserve Bank, the legislative appointed protector of Credit Cardholders, did naught for the Retail Supply Side prior to March 2014

RBA breached it Extensive Responsibilities to Persistent Revolvers by taking 12 years circa to 'stamp out' five ploys of Unconscionable Conduct listed in Joint Media Release "Getting a Better Deal on Credit Cards and Mortgages" that initially surfaced in the USA, migrated to the UK and onto Australia by the late 1990s - 18 months slower than the UK Regulator

Below are extracts from Reserve Bank of Australia Bulletin  -  July 1998 - Australia’s New Financial Regulatory Framework that chronicles the Reserve Bank's powers, set out in the Payment Systems (Regulation) Act 1998, that allow the Reserve Bank to undertake more direct regulation of ‘designated’ payments systems to –

"... promote competition in the market for payments services, consistent with the overall stability of the financial system..." when it judges it to be "in the public interest" which may involve the imposition of access rules or operating standards for participants in such systems:

"The new Payments System Board is responsible for the Bank’s payments system policy, the objectives of which are:

•     controlling risk in the financial system arising from the operation of the payments system;

•     promoting the efficiency of payments systems; and

•     promoting competition in the market for payments services, consistent with the overall stability of the financial system.

The Bank’s powers in this area, set out in the Payment Systems (Regulation) Act 1998, allow it to undertake more direct regulation of ‘designated’ payments systems when it judges it to be in the public interest.  This may involve the imposition of access rules or operating standards for participants in such systems. The Act also provides a framework for regulation of purchased payment facilities, such as travellers cheques and stored-value cards."

The UK regulator, BIS, for Credit Cards 'et al' published the below three reports to 'stamp out' (effective 31 Dec 2010) Unconscionable Predatory Marketing by granting 'Five New Rights'.  Listed after each of the below three BIS publications is the number of references to "...vulnerable consumers..." or similar:

• 1st UK Regulator Report  -  July 2009  A Better Deal for Consumers - Delivering Real Help Now and Change for the Future - "....the more vulnerable...", "....financially vulnerable..."... or "...vulnerable consumers..." appears 14 times.

• 2nd UK Regulator Report  -  Oct. 2009   A Better Deal for Consumers - Review of the Regulation of Credit and Store Cards: A Consultation - "...Help for the most vulnerable..." or "...vulnerable group..." appears 4 times

• 3rd UK Regulator Report  -  March 2010   A Better Deal for Consumers - Review of the Regulation of Credit - and Store Cards: Government - Response to Consultation - "....financially vulnerable..."... or "...vulnerable consumers..." appears 9 times.

In the abovementioned 3rd UK Regulator Report  -  March 2010, the UK regulator, BIS, for Credit Cards granted Credit Cardholders the below 'Five New Rights' in March 2010 (effective 31 Dec 2010) which included banning Unconscionable  Predatory Marketing practices (that morphed from the late '90s in the USA, then the UK, then Aust by the late 1990s) that were targeted at "the most vulnerable in society":

1 ●● Right to repay: consumers’ repayments will always be put against the highest rate debt first. For consumers opening new accounts the minimum payment will always cover at least interest, fees and charges, plus 1% of the principal to encourage better repayment practice.

2 ●● Right to control: consumers will have the right to choose not to receive credit limit increases in future and the right to reduce their limit at any time; and consumers will have better automated payment options. Consumers will have access to these options online.

3 ●● Right to reject: consumers will be given more time to reject increases in their interest rate or their credit limit.

4 ●● Right to information: consumers at risk of financial difficulties will be given guidance on the consequences of paying back too little. Consumers will be given clear information about increases in their interest rate or their credit limit, including the right to reject.

5 ●● Right to compare: consumers will have an annual statement that allows for easy cost comparison with other providers.

The Reserve Bank largely followed suit 18 months later (effective 1 July 2012) with changes listed 1. to 5. in Joint Media Release "Getting a Better Deal on Credit Cards and Mortgages" dated 5 July 2011.  The RBA plagiarized the U.K. slogan "Getting a Better Deal" used by BIS in its above three reports to similarly 'stamp out' Unconscionable Predatory Marketing.

The U.K. BIS 'Selling the message" with the slogan, 'Five New Rights', to the U.K Credit Cardholder populous of 'stamping out' five prevalent Predatory Marketing Practices that migrated from the USA to the UK and on to Australia (by the late 1990s - see History of Balance Transfers) such as the Unconscionable 'Order of Payments' Allocation Practice and charging OverLimit Fees that evidenced the "wolves stalking the dawdling deer" and the "mountain lion savaging the slowest buffalo" was indeed apt.  So much so that the RBA plagiarized (from BIS) in Joint Media Release "Getting a Better Deal on Credit Cards and Mortgages" the promotional metaphor Getting a Better Deal first used in BIS report (to the UK Parliament) dated 5 July 2009 "A Better Deal for Consumers - Delivering Real Help Now and Change for the Future".

Extensive Powers and Responsibilities notes at Section 3 that the Reserve Bank has significantly greater powers/responsibilities to "...the economic prosperity and welfare of the people of Australia", than the Bank of England or the U.S. Federal Reserve.

Chapter 1 evidences that the Productivity Commission and the ABS rank Australians as having between Level 1 (low) and Level 5 (high) Financial Literacy Capacity.  A person assessed at Level 5 possess up to five times the skills within the particular domain (eg Numeracy, Literacy, Prose etc) than a person assessed at Level 1.  Level 3 or above is required "to meet the complex demands of everyday life and work in the emerging knowledge-based economy".  ASIC 2010 report notes "These findings have implications for our regulatory regime, which relies upon disclosure as a critical element of our consumer protection system."

Inexplicably Reserve Bank Copious Publications on Credit Cards not mention protecting "vulnerable consumers" or "at risk consumers", that the U.K. regulator of Credit Cards, BIS, overtly recognised to protect (in Three U.K. Expeditious Regulator Reports):

Does the Reserve Bank -

(i)         consider that all Credit Cardholders possess the same Numeracy and Literacy Capacity?  OR

(ii)        merely assume 'caveat emptor'?

Other contributing 'policy determining parties' (listed just below) have recognised protecting "economically vulnerable families and individuals" or "at risk consumers", but the RBA hasn't had this cohort on its radar in its welter of Copious Publications.

Reserve Bank not recognizing in its Reserve Bank Copious Publications on Credit Cards the need to protect vulnerable Credit Cardholders (with low Numeracy and Literacy Capacity) constitutes breach of its Statutory Duty and Fiduciary Duty

Reserve Bank webpage Credit Cards Regulatory Decisions evidences that the Reserve Bank (the peoples appointed protector for Credit Cardholders, and one of Australia' Three Financial Services Regulators), did naught for the Retail Supply Side prior to March 2014.

The responsibility to the peoples of the UK (re the marketing/provision of Credit Cards) falls upon Her Majesty's Government in the UK, and NOT the UK's central bank.  In Australia, that responsibility falls upon the Reserve Bank and pursuant to Section 11 of the Reserve Bank Act 1959 the Reserve Bank should have alerted the Federal Government about the five Unconscionable Predatory Marketing ploys listed 1. to 5. in Joint Media Release "Getting a Better Deal on Credit Cards and Mortgages"

Balance Transfer Interest-Free Period Offers explains Predatory Advertising and the 'Order of Payments' Allocation Practice allocation practice that migrated from the USA to the UK and on to Australia (in the late 1990s) that evidenced Numeracy And Literacy Targeting of "the most vulnerable in society".  The RBA did not ban 'Order of Payments' until 1 July 2012, despite it patently involving escalating Unconscionable Conduct for the 10 years prior.

Through Three U.K. Consecutive Expeditious Regulator Reports the financial services regulator in the UK, BIS, forbade 'inter alia' the 'Order of Payments' practice (on 31 Dec 2010) because it was Unconscionable Conduct targeted at  "the most vulnerable in society" and established Five New Rights for U.K. credit and store card users to better protect them.

Proponents in Australia that largely pursued the above BIS Five New Rights for credit and store card users:

1.       On 15 August  2010, Daily Telegraph article Gillard to rein in credit cards noted 'inter alia':

"LABOR will stop banks and credit providers from automatically increasing credit limits and force them to tell the truth on application forms and statements.

Prime Minister Julia Gillard said she would also put the power to nominate a credit limit back in the hands of the consumer by stopping banks from offering an upper limit on each application.

Under the policy the Labor Party will make it illegal for banks to offer regular credit limit increases unless consumers opt to receive it as a service.

Credit card statements will have to include a section on how long it will take to pay off the credit card if the holder only makes the minimum payment and how much interest would be paid over that time.

If elected Ms Gillard said she would consult with financial institutions and consumer groups on the reforms."

2.       The Commonwealth Govt. GREEN PAPER titled "National Credit Reform: Enhancing Confidence and Fairness in Australia’s Credit Law" - July 2010 included:

                  • "adequately protect consumers, especially vulnerable or disadvantaged consumers, from revolving debt levels that cannot be repaid without substantial hardship;"

                  The Ministerial Council on Consumer Affairs options were specifically targeted at imposing protections for ‘vulnerable or disadvantaged consumers’.

3.       Chapter 11 of the Parliament of Australia website report titled Competition within the Australian banking sector dated 2010 includes:

        Chapter 2 of the Parliament of Australia website report titled Overview of the Australian credit card market  dated 2010 includes:

4.       St Vincent de Paul's "Submission on Matters Relating to Credit Card Interest Rates 10 Aug 2015 includes:

" ....... it is likely that more financially vulnerable people will be using credit cards to tide them over in-between periods of employment.  It is ironic that, in an era where banks are still reporting growth in profits,[1] some of the banks’ most profitable customers are those on low incomes caught in the spiral of credit card debt."

In our work every day, we see these economically vulnerable families and individuals resort to borrowing money, selling items of value, taking out short-term pay day loans, and seeking the assistance of welfare services in addition to increasing the limit or taking out new credit cards when the offer is made available.[1] 

5.       The Australian Institute Paper No. 4 - Money and power - The case for better regulation in banking dated August 2010:

"In fact, some of their most profitable customers, such as those who never pay off their credit cards in full, are also the very people who are least able to handle more debt. In this way, the impulses of individual consumers, carefully channelled by the banks, regularly come into conflict with the public interest.

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RBA breached it Extensive Responsibilities to Persistent Revolvers by taking 12 years circa to 'stamp out' five ploys of Unconscionable Conduct (that initially surfaced in the USA, migrated to the UK and onto Australia) listed 1. to 5. hereunder in Joint Media Release "Getting a Better Deal on Credit Cards and Mortgages" dated 5 July 2011.

1. Force credit card lenders to allocate repayments to clear higher interest debts first, thereby outlawing the 'Order of Payments' Allocation Practice;

2. Stop lenders from bombarding consumers with pre-approved, tick 'n' flick offers to increase their credit limits;

3. Prevent lenders charging an OverLimit Fee to customers who go over their credit limit, unless they've expressly asked for this service;

4. Make it mandatory for credit-card application forms to include a clear summary of key account features;

5. Require all lenders to clearly warn consumers on their monthly credit statement of the consequences of only making minimum repayments.

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The National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill was passed on 4 July 2011 and was effective as at 1 July 2012, whereupon Credit Card Issuers were no longer able to apply the afore-mentioned 'Order of Payments' Allocation Practice, but must now apply a Credit Cardholder's payment/s to the highest interest rate debt, namely the most expensive part of a Credit Cardholder's Credit Card  Outstanding Indebtedness. Also banned OverLimit Fees on new Credit Cards.  finder.com.au provides "Find out about the Credit Card Reforms happening 1st July 2012".

Re 4. immediately above, Credit Card Issuers have since conjured up more Predatory Advertising to Target Credit Cardholders With Low Financial Literacy Capacity that continued unchecked by Two Of Australia's Three Financial Services Regulators.