Thirty Two Questions and Supporting Evidence    Submission Letter to Royal Commission April-2018   Defined Terms & Documents  

17th Question

Will the Royal Commission ask the CEO of the ABA -

*        if Example 1 - Unconscionable Conduct - St George Visa Card of the Nine Examples within Labyrinth of ‘Concealed Spiders’ constitutes Unconscionable Conduct (based in the ACCC's definition of Unconscionable Conduct).  AND

*        did St. George Bank by charging interest @ 20% from the date of each Purchase for the subsequent two months constitute an illegal penalty under the common law equitable penalty doctrine, because that interest charge was collateral to the main obligation (to pay the Closing Balance by the Payment Due Date) and the withdrawal of the Interest Free Period was intended to be in terrorem of the other party (the Cardholder).  In other words, it was intended to scare the Cardholder (Mr. McK_nn) into paying his Closing Balance on time and the 20% interest rate was a Usurious Interest Rate and therefore an unconscionable penalty because 20% from the date of each Purchase did not reflect the losses St. George Bank incurred as a result of the Cardholder's failure to pay the shortfall of $40 (2.06%) by the Payment Due Date, particularly as Mr. McK_nn was charged 20% on all his Purchases of $1,936.92, even though he had repaid 97.94% of his Closing Balance 10 days prior to the Payment Due Date.

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Supporting Documented Evidence re 17th Question

Example 1 notes inter alia that St George Credit Cardholder, Peter McK_nn, had a Closing Balance of $1,936.92 of his Visa Gold Credit Card and paid $1,896.92 (97.94%, of his Closing Balance) to St. George Bank on 22 May '14 (10 days prior to his monthly Payment Due Date) which was a shortfall of $40 on the Closing Balance of $1,936.92 of his Visa Gold Card.  Peter was charged interest @ 20% by St. George Bank on $1,936.92 (his total Purchases for the previous month) even though he had repaid 97.94%, of his Closing Balance 10 days prior to the Payment Due Date.  He then forfeited his Interest Free Period for two subsequent months, thereby being charged 20% from the date of each Purchase.

     CEO of the ABA following the ABA’s release of its compulsory Banking Code of Practice 2019 where -
            “Customers only paying interest on what remains on a credit card and not the full amount of Purchases if a loan is being paid down” and
           “Customers do not forfeit their Interest Free Period for up to two subsequent months once the Outstanding Amount is repaid;

Australian Bankers Association 'Banking Code of Practice 2019'

Banks revamp code of practice in face of scandals, royal commission - ABC News - 20 Dec 2017 - Peter Ryan

 

Below are extracts from only two references to 'credit card' or 'credit cards' in the ABA's voluntary code of conduct titled CODE OF BANKING PRACTICE 2013 and Code Compliance Monitoring Mandate:

"22.     Chargebacks

22.1. If you have disputed a card transaction with us within the required timeframe, we will, in relation to a credit card or, where relevant, a debit card transaction (including an unauthorised payment debited to your card account pursuant to a recurring payment arrangement):

        (a)     claim a chargeback right, where one exists, for the most appropriate reason; and

        (b)     not accept a refusal of a chargeback by a merchant’s financial institution unless it is consistent with the relevant card scheme rules.

22.2. We will make available general information about chargebacks on our website or by electronic communication to you and we will notify you of the availability of this information on or with the relevant card statement of account at least once every 12 months.

"41.5. If you have a credit card account with us on the 2013 transition date, we will give you a statement containing the information described in clause 12.5 no later than 12 months after the 2013 transition date (unless already provided).

41.6. Except as expressly stated in this clause, the application of the Code of Banking Practice November 1993 and the 2003 Code are not altered by the provisions in this clause 41.

41.7. To the extent of any inconsistency, this Code is to be read subject to the ePayments Code."

Below are extracts from 32 pertinent references of the 35 references to 'credit card' or 'credit cards' in the ABA's compulsory code of conduct titled Banking Code of Practice that was published in September 2018 which becomes mandatory on 1 July 2019:

"60. When you apply for a new consumer credit card or credit limit increase, we will assess your ability to repay the amount of the credit card limit within a five year period.

 

Setting a credit card limit when you apply

61. You can let us know what your preferred credit card limit is and we will not give you a limit that is more than what you requested. Transactions may be processed which nevertheless cause you to exceed your limit.

CHAPTER 33

Managing a credit card

We will pay off your higher interest credit card debts first

125. Any payment you make to your consumer credit card will be applied first to the amounts that have the highest interest rate as at the last statement date. However, if you ask us to, we may agree to apply a repayment against a specific debt owed.

Charging interest retrospectively on portion of credit card balance that is paid off by the due date

126. If you have an interest-free period on a consumer credit card balance, or part of a balance, for a period of time, we will not retrospectively charge you interest for that period because you didn’t pay off that balance, or part of that balance, by the due date.

We will give you notice before an introductory balance transfer offer ends

127. If you have an introductory balance transfer offer on your consumer credit card, we will give you at least 30 days’ notice before it is due to end.

You may ask us to reduce your credit card limit

128. If you ask us to reduce your existing consumer credit card limit, we will enable you to do this online or by contacting us. This will be subject to any product features that apply (for example, where the product requires a minimum limit).

You will still be required to first repay any amount above the new limit.

Credit card limit increases

129. We will not offer to increase your consumer credit limit on your existing credit card other than in response to a request by you for the increase in your credit limit.

You can ask us to dispute a transaction on your credit or debit card account

130. If, within the time limit set by your credit card or debit card scheme rules, you tell us that you dispute a transaction on your card, then we:

  1. will claim the relevant amount back if we find it be incorrectly charged and you have not contributed to the loss; or

  2. may accept the merchant’s refusal to make that chargeback only if the refusal is made in a way allowed under the relevant card’s scheme rules.

131. You have the rights under the above paragraph even if the payment was debited from your credit card or debit card account and was part of a recurring payment arrangement you have with that merchant.

132. You may also have a right to dispute an unauthorised transaction under the ePayments Code or as contained in your terms and conditions.

133. We will make general information about disputed transactions available to you and notify you of the availability of this information at least once every 12 months.

CHAPTER 34

Direct debits and recurring payments

We will give you a list of your direct debits and recurring payments

134. If you ask us to, we will give you a list of direct debits and recurring payments on your accounts for up to the previous 13 months. The list will include only those direct debits and recurring payments that are known to us from the information we receive about your transactions.

The regular payments from your:

  1. deposit account are called ‘direct debits’. This is where you have given your deposit account details (BSB and account number) to allow a merchant or service provider to debit your account regularly to pay for the services they provide you.

  2. credit card account are called ‘recurring payments’. This is where you have given your credit or debit card details (card number, expiry date and security code) to allow a merchant or service provider to charge your credit card regularly to pay for the services they provide you.

What we will do when you ask to cancel a direct debit or advise us of a problem with a direct debit

We will tell you if we cancel your credit card

144. If we cancel your credit card we will tell you. If appropriate, then we will give you the general reasons for doing so.

You can ask us to cancel your consumer credit card

145. If you want to cancel your consumer credit card, then we will provide the ability for you to do this online or over the phone. If you ask us to, we will give you information about recurring payments and your outstanding balance.