It seems we can finally say goodbye to those annoying letters inviting you to increase your credit limit when you really don’t need it and didn’t ask for it.
These are the very letters that seem to come in the mail when you need the cash but really shouldn’t be jacking up your debt any higher.
Changes have just been made to the Treasury Laws Amendment (Banking Measures No. 1) Bill 2017, which delivers a package of banking reforms including new legal protections for people who want easily cancel their credit cards online.
According to consumer group choice, the package of consumer protections will see banks:
- Banned from approaching people with unsolicited credit card limit increases;
- Provide an online option to cancel cards and reduce credit limits;
- Simplify the calculation of interest; and
- Implement tighter responsible lending obligations.
“For years, banks have been forcing consumers to jump through hoops when they try to cut ties with debt. Meanwhile, banks are offering online credit card approval under 60 seconds,” says CHOICE CEO Alan Kirkland.
“Too often banks have loaded up consumers with excessive credit limits without properly considering a person’s ability to repay. This is made worse by banks requiring consumers to go through archaic offline processes in order to cancel or limit a credit card.
“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 are unable to cancel a card.
“Consumer groups brought these problems to the attention of banks years ago, but yet again the Federal Government has been required to step in and fix the problem.
“This is another example that demonstrates that banks can’t be trusted to quickly self-regulate in customers’ interests. This is why CHOICE is calling for the Royal Commission to explore cases where the banking sector has dragged its feet and delayed reform.”
“From delaying action on excessive ATM fees, to lobbying to overturn the Furture of Financial Advice reforms and attempting to prevent a Royal Commission, the banks deliberate strategy of inaction continues to harm consumers.
“We congratulate Parliament for doing what the banks have been reluctant to do themselves; make real changes that will reduce harm caused by credit card debt and benefit Australians,” Mr Kirkland says.
If you’ve been ripped off by the banks, CHOICE wants to hear about it. To contribute to our response to the Royal Commission go to: https://campaigns.choice.com.