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Defined Terms and Documents
Example 3 -
Unconscionable Conduct -
ANZ's 'First Visa Card' and 'Low Interest Visa Card'
ANZ's below explained advertising of its 'First Card' and 'Low Interest Card' seeks to mislead
prospective new
Cardholders, particularly
Financially Uneducated And Vulnerable Australians
- refer
Numeracy And Literacy Range Of
The Australian Population
ANZ
has breached its obligations under
Regulation 28LFA
of the
National Consumer Credit
Protection Amendment
(Home Loans and Credit
Cards) Act 2011 due
to a legal drafting error in its definition of
Closing Balance which does not
include Balance Transfer amount;
this omission has
resulted in ANZ charging vast amounts of interest at 19.74% p.a. on its
'First Card' and
'Low Rate Card' @
13.49% p.a. beyond the terms of its definition of
Closing Balance.
ANZ's offer letter and attachments (5 pgs of offer documents) -
I.
"0% p.a. first 16 months
on balance transfers"
offer letter to Ms. K. G_rd_n dated 5 Jan '15 [1 pg] lists
"how much you could save"
over 16 months by transferring an existing credit card debt
balance (eg $5,000 debt balance could save $1,251 in interest, $8,000 debt
balance could save $2,001 in interest), with the interest rate on Purchases for the
"First Card" 19.74% and "Low Rate Card" 13.49%;
II.
'Choose the ANZ credit card that
is right for you'
[1 pg] lists 'inter alia' that in order to enjoy
"Interest Free Days on Purchases"
you had to comply with the below 'fine print' clause 4:
4. Interest free periods on the purchases do not apply if you do
not pay your Closing Balance (or, if applicable, your 'Closing
Balance' less Instalment Plan and Buy Now Pay later plan
balances) shown on each statement of account in full by the
applicable
Due Date. Payments to your account are applied in the
order set out in the
ANZ Credit Cards Conditions of Use;
III.
'Key facts about this credit card'
[1 pg] notes 'inter alia'
adjacent to
'Interest-free period':
*
"up to 44 days on
the purchase balance" for the ANZ First Card
*
"up to 55 days on the purchase balance"
for
the ANZ Low Rate Card;
IV.
'Credit Card Application Form'
[2 pgs]
provides a paper based application form for the ANZ First Card or the ANZ Low
Fee Card.
ANZ's
afore-mentioned offer documents (posted to the Writer's home
address) which aggregate to 5 pages do not explain
that -
A. the only
way to achieve the material savings of $2,001 in interest costs on an $8,000
existing debt Balance Transfer is to
not make any Purchase/s during the initial 16 months; making
a
Purchase/s is the fundamental
purpose of holding a Credit Card. If any
Purchase/s is made whilst ever any part of the
Balance Transfer amount @ 0% interest for 16 months remains unpaid, then interest is charged (at the below
interest rates) from the date
of each Purchase (with no
Interest Free Period entitlement):
* "First Card" @
19.74% p.a.
* "Low Rate Card"
@ 13.49% p.a; and
B "If
you don't pay the full Closing Balance shown on a statement of account by the
applicable Due Date, the purchases balance will attract interest. However, you
may regain the benefit of interest free periods on purchases by paying the full
Closing Balance shown on two subsequent consecutive statements by each
applicable Due Date."
- refer
FAQs
How does the interest free period work?
Hence, if a
Cardholder makes any
Purchase/s and does not repay
the
Balance Transfer amount 'in toto',
then he/she pays interest on a "First Card" @
19.74% p.a. on all Purchases during that month from the date of each
Purchase.
In addition,
s/he forfeits
the
Interest Free Period for the subsequent two months, whereupon
a
"First Card" Cardholder continues to
pay interest at the
Usurious Interest Rate
of 19.74% p.a.
for an additional two months until his/her
Interest Free Period is re-installed - a
total of three months interest on all
Purchases @ 19.74%
p.a. (The RBA's official Cash
Rate is 2.25% p.a. as at 1 May '15)
Further below is a 'screen print' of ANZ's webpages for its
First Visa Card.
ANZ recognizes (on
page 10 of its 98 pages booklet
in tiny Arial 9 font titled
"ANZ
Credit Cards - CONDITIONS OF USE | 19.09.2014 CONSUMER
CREDIT CARDS")
that it has misled many new Cardholders, which includes
its
First Visa Card Low annual fee $30, into believing that they
would enjoy, with regard to the
First Visa Card, "Up
to 44 interest free days on purchases3"
when, in fact,
First Visa Cardholders are charged at the
Purchase interest rate of
19.74% pa from the date of each
Purchase. This acknowledgement of a
misconception
by ANZ is
reprinted in yellow
background immediately below
and evidenced in detail in this webpage:
"A
misconception
about
balance
transfers
is that
a
0% balance
transfer
means
that interest
will
not
be charged
on
any
component
of
your
credit
card
account.
Whilst
interest
will
not
be
charged
on
the
0% balance
transfer,
interest
will
still
be
charged
in the
normal
manner
on
any
other
debits
to your
account. For
example,
interest
will
be
charged
on
your
purchases
balance,
except
to the
extent
an interest
free
period
applies."
The
amount of the
0%
balance
transfer
will
be included
in the
Closing
Balance
shown
on
a relevant
statement
of
account. Accordingly, an interest
free
period
will
generally
not
apply
in relation
to relevant
purchases
if
you
do
not
pay
the
full
Closing
Balance
(including
the
0%
balance transfer)
for
such
a
statement
of account
by the applicable
DUE
DATE.
In the above
extract from page 10 of ANZ's
"ANZ
Credit Cards - CONDITIONS OF USE | 19.09.2014 CONSUMER
CREDIT CARDS" ANZ
acknowledges that many new
Cardholders that enjoy a
Balance Transfer
misconceive/misunderstand and wrongly believe that, in the case of the
First Visa Card Low annual fee $30,
that they enjoy "Up
to 44 days interest free on purchases3."
as asserted in its webpage at 'Features and benefits' below.
Below is clause 3 under 'Important information' from the below ANZ First
Card webpage:
3.
Interest free periods on the purchases do not apply if you do
not pay your Closing Balance (or, if applicable, your 'Closing
Balance' less Instalment Plan and Buy Now Pay later plan
balances) shown on each statement of account in full by the
applicable
Due Date. Payments to your account are applied in the
order set out in the
ANZ Credit Cards Conditions of Use.
ANZ has commenced the words
Closing Balance
with a capital letter which
constitutes a 'defined term' or 'definition'.
ANZ has not provided a definition of
Closing Balance
in its below
extracted webpage advertising its
First Visa Card Low annual fee $30.
ANZ provides the below definition of 'Closing Balance' on page 65
of its 98 pages
"ANZ
Credit Cards - CONDITIONS OF USE | 19.09.2014 CONSUMER
CREDIT CARDS". (Page 65 commences 48
'Definitions' under heading 'Meaning of words'):
‘Closing
Balance’
means,
in
relation
to a
statement
period,
the
outstanding
balance
on the
credit
card
account
as at the
close
of
the
statement
period
(and,
for the
avoidance
of
doubt,
includes
the
Instalment
Plan
and
Buy
Now
Pay
Later
plan
balances
as at the
close
of
that
statement
period);
Significantly, ANZ's above 'Definition' of
Closing Balance
does NOT include 'the amount of any
0% balance transfer' as a part of the
Closing Balance which
materially flaws ANZ reliance upon
page 10 of
"ANZ Credit
Cards - CONDITIONS OF USE | 19.09.2014 CONSUMER CREDIT CARDS" [100 pgs] as part
of "Important things to know about using your ANZ credit card - Balance
transfers can affect how interest is charged on your credit card account"
which includes:
"A
misconception
about
balance
transfers
is that
a
0% balance
transfer
means
that interest
will
not
be charged
on
any
component
of
your
credit
card
account.
Whilst
interest
will
not
be
charged
on
the
0% balance
transfer,
interest
will
still
be
charged
in the
normal
manner
on
any
other
debits
to your
account. For
example,
interest
will
be
charged
on
your
purchases
balance,
except
to the
extent
an interest
free
period
applies."
The
amount of the
0%
balance
transfer
will
be included
in the
Closing
Balance
shown
on
a relevant
statement
of
account. Accordingly, an interest
free
period
will
generally
not
apply
in relation
to relevant
purchases
if
you
do
not
pay
the
full
Closing
Balance
(including
the
0%
balance transfer)
for
such
a
statement
of account
by the applicable
DUE
DATE.
Below is an extract from page 8 of ANZ's
"ANZ
Credit Cards - CONDITIONS OF USE | 19.09.2014 CONSUMER
CREDIT CARDS":
"Understanding
interest
and
interest
free
periods
Interest
free
periods
on
purchases
We offer credit card
accounts with interest free periods on purchases and some credit card
accounts without. If you’re unsure whether your account has interest
free periods on purchases please refer to your Letter of Offer.
If your account has interest free periods on purchases, you can avoid
paying interest on the purchases balance by always paying the full
Closing Balance shown on each statement of account by the applicable DUE
DATE."
Having regard to the afore-mentioned inconsistencies about what indebtedness
constitutes the
Closing Balance, any prospective
Cardholder of an ANZ First Visa Card is entitled to
believe that if it pays the
Closing Balance as defined above that it
would
enjoy "Up
to 44 days interest free on purchases3. as asserted in
its webpage at 'Features and benefits' below. But that is
not the case.
Little wonder that ANZ notes
"A
misconception
about
balance
transfers
is that
a
0% balance
transfer
means
that interest
will
not
be charged
on
any
component
of
your
credit
card
account
because ANZ has advertised that
"Up
to 44 interest free days on purchases3
if the
Closing Balance is paid by the 'Due Date'.
ANZ has patently breached
its obligations pursuant to
Regulation 28LFA
of the
National Consumer Credit
Protection Amendment
(Home Loans and Credit
Cards) Act 2011 (Cth) Division 3, ss133BB‐133BD
which were introduced by
the Gillard Govt on 1 July 2012 because
ANZ's
Key Facts Sheet titled "Key facts about our credit cards"
-
A.
notes at
Interest-free period "Up to 44 days on the purchases
balance"; and
B.
does not alert that this
Interest-free period on Purchases is
not available whilst any of the 'Balance Transfer' remains unpaid.
Consumer Credit Reform and Behavioural Economics: Regulating Australia’s Credit Card Industry written
by Paul Ali, Cosima McRae and Ian Ramsay explains on its page 13:
" Regulation 28LFA
requires lenders to provide a Key Fact Sheet ("KFS") at the time
an application for a credit card is made by a consumer. The KFS must be contained on the application form
itself, or given to the consumer on a separate piece of paper with the application and the lender
cannot merely refer to a website. Critically, credit card fees, charges and interest rates are unbundled with
the specification of a plain language, large font table that separates fees, interest rates, minimum
repayments and other charges. This ‘unbundling’ of fees and charges addresses the optimism bias by
separating the short term low costs (teaser fees and introductory rates) from longer term interest
rates applying to balances. The timing of disclosure occurs before the contract is signed, which may alter
behaviour by prompting the consumer to assess realistically their capacity to repay."
ANZ has been mischievous in its
Key Facts Sheet for
its
First Visa Card whereupon too many new customers with a
Balance Transfer have believed that they would enjoy an
Interest Free Period
on
Purchases provided they have paid their
Closing Balance
(defined above)
by the
Due Date.
A Word file version
of above 'Important information' in a jpg file is immediately below with pertinent
text for ANZ First Visa card in
yellow highlight.
Important information
All applications for credit cards are subject to ANZ's credit
assessment criteria.
View
ANZ terms, conditions, fees and charges
1. Offer only available to new and approved credit
card applicants who apply for an ANZ First credit card account
with the balance transfer by 17 February 2015. Offer available
in respect of balances transferred from non-ANZ credit and store
card accounts only. Not available in conjunction with other
offers, packages or promotions or in respect of balances
transferred from an existing ANZ account. The offer must be
requested at the time of applying for the credit card. The
Promotional Plan annual percentage interest rate expires 16
months after the date the credit card application is approved,
and after the first 16 months the standard balance transfer
annual percentage rate will apply to any unpaid Promotional Plan
balance. The standard balance transfers annual percentage rate
is 19.74% p.a. for ANZ
First as at Saturday, 31 May
2014 and is subject to change.
Terms
and conditions apply to balance transfers. Payments to your
account are applied in accordance with the ANZ Credit Cards
Conditions of Use. ANZ reserves the right to withdraw this offer
at any time.
2. Standard annual percentage interest rate is
19.74% p.a. on purchases
and 21.49% p.a. on cash
advances as at Saturday, 31 May
2014 and is subject to change.
3.
Interest free periods on the purchases do not apply if you do
not pay your Closing Balance (or, if applicable, your 'Closing
Balance' less Instalment Plan and Buy Now Pay later plan
balances) shown on each statement of account in full by the
applicable
Due Date. Payments to your account are applied in the
order set out in the ANZ Credit Cards Conditions of Use.
4. Extended Warranty Insurance, 90-day Purchase
Security Insurance, Best Price Guarantee Scheme and Interstate
Flight Inconvenience Insurance is underwritten by Zurich
Australian Insurance Limited ABN 13 000 296 640, AFSL 232507.
Terms and conditions apply to the cover provided. For more
information refer to the
Premium Cards - insurances booklet (PDF 356 kb) – Part 2
Zurich Policy Wordings.5. Provided the cardholder didn’t
contribute to the loss and notified ANZ promptly of the fraud.
5. Provided the cardholder didn’t contribute to
the loss and notified ANZ promptly of the fraud.
6. Subject to ANZ
Designmycard Image Guidelines. Terms and Conditions
available at the
Designmycard website.
7. ANZ goMoney™ for Android™ is only available in
Google Play™. ANZ goMoney™ for iPhone is only available from the
App Store. iPhone is a trademark of Apple Inc., registered in
the U.S. and other countries. App Store is a service mark of
Apple Inc. Android and Google Play are trademarks of Google Inc.
8. The Overseas travel and medical insurance
master policy, the Transport accident cover master policy and
Rental excess cover master policy (the Master Policies) are
issued by QBE Insurance Australia Limited ABN 78 003 191 035
AFSL 239545 to ANZ. Cover under the Master Policies is provided
to eligible participating cardholders by operation of section 48
of the Insurance Contracts Act 1984 (Cth), The eligibility
criteria which you must meet for each of the Master Policies is
set out in the
Premium Cards - Insurance booklet (PDF 356kB) - Part 1 QBE
Product Disclosure Statement and policy wordings. When overseas,
we recommend that you carry proof of that you have met the
eligibility criteria. Any advice has been prepared without
taking into account your objectives, financial situation or
needs. You must decide whether or not it is appropriate, in
light of your own circumstances, to act on this advice. You
should ensure you obtain and consider the PDS before you make
any decision to acquire it.
™ ANZ Falcon is a trademark of Australia and New Zealand Banking
Group Limited (ANZ) ABN 11 005 357 522. Falcon™ is a trademark
of Fair Isaac Corporation.
After telephoning 3 staff on ANZ's Help Desk #
1800050.967, the Writer established that ANZ relies upon
"ANZ Credit
Cards - CONDITIONS OF USE | 19.09.2014 CONSUMER CREDIT CARDS" [98 pgs],
specifically "Important things to know about using your ANZ credit card"
(page 7) which leads to the below extract of "Balance
transfers can affect how interest is charged on your credit card account"
on page 10. The first and third person the
Writer spoke to said
they wanted to check with their central control. They both returned a few
minutes later and told the Writer
that any unpaid Balance Transfer was included
in the calculation of the
Balance Transfer. The second Help Desk chap
that I spoke to, Phil, was adamant that '44 days interest free on purchases'
applied even with an outstanding
Balance Transfer.
Above is a jpg file of page 10 of
"ANZ Credit
Cards - CONDITIONS OF USE | 19.09.2014 CONSUMER CREDIT CARDS" [100 pgs] as part
of "Important things to know about using your ANZ credit card - Balance
transfers can affect how interest is charged on your credit card account".
A Word file version
of above page 10 in an jpg file is immediately below with pertinent text re
interest on Purchases where a balance transfer remains unpaid for the ANZ First
Visa card in yellow
highlight.
Balance
transfers
can
affect
how interest
is
charged
on your
credit
card
account
A
balance
transfer
is
where
we
provide
credit
to
pay
off
an
outstanding
amount
on a
non-ANZ
account
(such
as a credit,
charge
or
store
card
account),
and
we have
agreed
(at your
request)
to treat the
transaction
as a
balance
transfer.
In
some
cases,
a
promotional
interest
rate
(for
example,
2.9%
p.a.
for
12
months,
or
0%
p.a.
for
6
months) may
apply
to
that
balance
transfer.
Before
requesting
a
balance transfer,
it’s
important
to
know
that we
will
generally
start
charging interest
on
that
balance
transfer
from
the
date
on
which
we
process
it.
A
misconception
about
balance
transfers
is that
a
0% balance
transfer
means
that interest
will
not
be charged
on
any
component
of
your
credit
card
account.
Whilst
interest
will
not
be
charged
on
the
0% balance
transfer,
interest
will
still
be
charged
in the
normal
manner
on
any
other
debits
to your
account. For
example,
interest
will
be
charged
on
your
purchases
balance,
except
to the
extent
an interest
free
period
applies.
The
amount of the
0%
balance
transfer
will
be included
in the
Closing
Balance
shown
on
a relevant
statement
of
account. Accordingly, an interest
free
period
will
generally
not
apply
in relation
to relevant
purchases
if
you
do
not
pay
the
full
Closing
Balance
(including
the
0%
balance transfer)
for
such
a
statement
of account
by the applicable
DUE
DATE.
For
further
details
about
how
interest
is
calculated please
refer
to Clauses
(19)
to
(21)
of
Part A in
this booklet.
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The Writer's comments:
Presentation of ANZ's webpages evidences that many Australians with
level 1 and level 2
Financial Literacy would be mislead to
believe that they will receive "Up
to 44 interest free days on purchases3".
The above
text on page 10 of ANZ's 98
pages
"ANZ Credit Cards -
CONDITIONS OF USE | 19.09.2014 CONSUMER CREDIT CARDS"
which includes
"A
misconception
about
balance
transfers
is that
a
0% balance
transfer
means
that interest
will
not
be charged
on
any
component
of
your
credit
card
account." is patent evidence that
ANZ has sought to deceive prospective users of amongst other Credit
Cards, it First
Visa Card that seek to park their debt at 0% for 16 months and believe
from ANZ's advertising information that they
will enjoy "Up to 44 interest free days on
purchases3".
Some other
Credit Card Providers overtly point out that the
Balance Transfer indebtedness negates any
Interest Free Period:
1. NAB's webpage
Balance transfers notes:
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