The Assistant Treasurer, Senator the Hon. Rod Kemp and the Minister for Customs and Consumer Affairs, the Hon. Warren Truss, MP today released a report on a review of the Electronic Funds Transfer Code of Conduct. This review was conducted by a taskforce drawn from the Treasury and the Australian Competition and Consumer Commission. The review involved wide-ranging consultations with industry participants and consumer bodies.
The EFT Code in its present form has been in place since 1991. The Code applies to financial transactions which are effected through the use of a card and a personal identification number. Because of difficulties involved in independently verifying the authorisation of transactions conducted in this manner, EFT technology poses some unique problems from a consumer protection viewpoint.
Reflecting these problems, the Code seeks to clarify and balance fairly the rights and obligations of consumers and EFT service providers in circumstances where the validity of a transaction debited to an account is in dispute. The Code also establishes clear guidelines for the disclosure of relevant contractual information relating to EFT products and services and the procedures that should be followed by EFT service providers in resolving disputes with their customers.
The review has confirmed that the EFT Code is generally working well. The number of complaints relative to the number of transactions made each year is very low, and many of those complaints are being resolved in favour of cardholders. Accordingly, the review does not make recommendations for radical change to the Code.
However, the review does recommend some minor refinements and improvements to the Codes operation and administration. These are aimed principally at improving the disclosure of relevant rights and obligations provided for in the Code.
The Government considers that the changes to the Code seek a reasonable balance between the rights of the consumers and the operational requirements of financial institutions without imposing undue compliance costs on industry.
The Government welcomes the report and encourages the industry to adopt the reports recommendations for changes to the EFT Code and to incorporate these changes into their relevant terms and conditions documents.
The review also recommends the Government establish a new working group to consider possible consumer issues arising from emerging technologies such as telephone and Internet banking and appropriate regulatory responses.
The Government considers that the establishment of such a working group should be the responsibility of the new regulator, the Australian Securities and Investments Commission (ASIC).
The Australian Payments System Council (APSC) will be responsible for monitoring the operation of, and compliance with, the revised Code until such time as the ASIC takes over that responsibility.
Copies of the report can be ordered from Isabelle Arnaud, ACCC, on (02) 6243 1071. The Report will also be available on the ACCC home page at http://www.accc.gov.au
CANBERRA
25 March 1998
Contact:
Penny Farnsworth, Senator Kemps Office
Telephone: (02) 6277 7360
Andrew Hall, Mr Trusss Office
Telephone: (02) 6277 7790