Senator Ian Campbell, Parliamentary Secretary to the Treasurer and Philip Ruddock, Minister for Immigration and Multicultural and Indigenous Affairs, today welcomed the release by the Australian Securities and Investments Commission (ASIC) of its report, Book Up: Some Consumer Problems.
The report is the first of a number of initiatives undertaken by the Commonwealth to address and educate the public about the issue.
`Book up' describes the practice whereby traders offer a small amount of short-term credit that is secured by a consumer leaving their debit card and PIN number with the trader or by having their social security cheque posted care of the trader's store.
The practice is common in parts of rural and remote Australia and usually involves Indigenous Australians.
ASIC undertook the report after receiving a number of complaints about the practice.
"The Government sees the report as an important step in creating a dialogue to address many of the problems associated with book up," Senator Campbell said.
"I encourage all of those with an interest in this issue, be they Indigenous communities and organisations, store owners, government agencies or members of the financial services industry, to participate in that dialogue and to work towards supporting initiatives that will seek to overcome problems associated with book up practices.
"The situation with book up in stores is complex. In some circumstances it offers benefits and there are clearly many users of the service that wish to see it continue. Undeniably, as the report clearly illustrates, the problems associated with poorly conducted book up are of great concern."
Mr Ruddock said the Government has been concerned about the issue for some time.
"It is a matter of concern if any Australians are giving out the personal identification number for their bank accounts and it is of greater concern that some unscrupulous people appear to be taking advantage of this.
"The Government will consider the options outlined in the ASIC report, in conjunction with a number of seminars and workshops to be held on the issue in the coming months.
"I also intend to raise the book up issue next Friday (15 March) when I meet with my State and Territory colleagues and ATSIC for a ministerial council meeting."
Problems identified by the ASIC report included:
- consumers being tied to one retailer for all their purchases, with the retailer possibly charging much higher prices than competitors;
- lack of access to funds when stores are closed;
- lack of transparency where poor records are kept;
- the potential for fraud and theft and exposure to increased liability for unauthorised transactions; and
- denying consumers the chance to develop electronic banking skills.
Possible options to improve how book up works raised in the report include:
- improving the way book up is operated;
- addressing underlying causes such as poverty and financial literacy;
- prohibiting or attempting to eliminate retention of debit cards and passbooks;
- supporting consumer education and skill development; and
- improving access to relevant or alternative financial services.
These potential policy responses will be debated at a workshop to be held in Alice Springs in April by the Aboriginal and Torres Strait Islander Commission (ATSIC), ASIC and the Australian Competition and Consumer Commission (ACCC).
In May, Reconciliation Australia and Indigenous Business Australia will also hold a two-day workshop on Indigenous banking. Mr Ruddock will chair one of the sessions at the workshop.
ASIC is also preparing a kit for use by people in communities to help them make better use of the book up practice as part of its consumer education focus.
08 March 2002
Contact: Tammie Webb, Senator Campbell's Office 08 9325 4227 or 0417 400
227
Jeremy Chitty, Mr Ruddock's office 0418 971 042
Copies of the report are available from ASIC's website at www.asic.gov.au