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

26th Question

Will the Royal Commission ask the Board of Directors of RBA to declare their aggregate -

*        Annual Cardholder Fees paid; and

*        Interest Costs paid,

by the eight members in the 12 months to 30 June 2018 for enjoying the convenience of the Lines of Credit provided by their personal Credit Cards?  Because in Dec 2001, the RBA advocated that users should pay for the patent convenience and cost-savings benefits derived.

 

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Supporting Documented Evidence re 26th Question

1.        Below is an extract from Section 5.2 'Scheme regulations and competition benchmarks' on page 115 of the above-mentioned Reform of Credit Card Schemes in Aust:  "A Consultation Document" – Dec 2001:

"Reform of credit card schemes will also have a direct impact on credit cardholders and is likely to result in some re-pricing of credit card payment services.  However, this is the means by which the price mechanism is to be given greater rein in the credit card market. A movement towards a “user pays” approach to credit card payment services would be consistent with the approach adopted by Australian financial institutions in pricing other payment instruments under their control.  As the ABA itself has confirmed: “Pricing services efficiently provides consumers with choice to use lower cost distribution channels and, therefore, facilitates a more efficient financial system. It is also fairer and efficient, because consumers only pay for what they use.”198

    The reform of credit card schemes sought by the RBA in "A Consultation Document" – Dec 2001 towards a “user pays” approach to credit card payment services never eventuated to the benefit of their Board of Directors at the expense of Persistent Revolvers.