Thursday, 02 March 2017 06:54

CHOICE wants govt to allow online credit card cancellation

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The consumer group CHOICE has called on the federal government to allow consumers who have credit cards from the big four banks to cancel them online without having to call or write to the banks.

The group's move came after the banks recently reviewed their credit card cancellation policies, but still insisted that consumers call or write in to effect a cancellation.

CHOICE's head of campaigns and policy Erin Turner said it defied belief that in an age when online banking was the norm, the ANZ, Commonwealth, Westpac and NAB did not permit online cancellation of cards.

"Not only do they not let you cancel your card online, ANZ also requires you to cut the card diagonally and post it back to them. In our view, this is clearly a ‘go slow’ by the banks to allow them to extract more fees and sell you more poor value products," Turner said.

“The banks have had long enough to address this issue. It’s time the federal government steps in and introduces legislation requiring these financial institutions to offer online cancellation options to customers.”

The banks face a parliamentary inquiry on Friday and CHOICE claimed ANZ and Westpac had made attempts to deflect criticism about card policies by saying that interest rates on some low-rate cards would be reduced.

“Although some of the banks might point to the changes they’ve made to just two credit card products in recent weeks, it’s little more than a tokenistic gesture when you consider the systems they’ve built to trap people into high-cost debt for as long as possible,” Turner said.

"We first raised our concerns about the banks' credit card cancellation policies in 2015, yet despite this and the federal government support for change last year, the situation remains exactly the same.

"It seems clear that the big banks’ ‘go slow’ on card cancellations is about protecting revenue from interest and fees, with data showing they slug consumers with an average annual fee of $146 compared to just $58 through a mutual- or customer-owned banks.

“Unfortunately, getting stuck paying excessive credit card interest is only one of the traps consumers face, with many of us paying excessive annual fees when we fail to cancel a card.”

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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