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Government fails to act on credit card clawback.



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Media Release

SENATOR STEPHEN CONROY ALAN GRIFFIN MP DEPUTY LEADER OF THE OPPOSITION IN THE SENATE SHADOW MINISTER FOR CONSUMER AFFAIRS SHADOW MINISTER FOR FINANCIAL SERVICES

27 April 2004

Government fails to act on credit card clawback

Today's ANZ record half yearly profit of $1.396 billion highlights the failure of the Government to ensure that the Reserve Bank's credit card reforms actually deliver for consumers.

Last year the RBA slashed credit card interchange fees by 40 per cent. Savings to the community of up to $400 million were forecast.

Labor warned the Government that the implementation of the changes had to be monitored by the ACCC to prevent the banks from clawing back the cuts in interchange fees through increases in other fees and charges.

Today's ANZ results reveal that consumers are paying the price for the Government's failure to heed this warning.

Since March 2003 fee income from the consumer finance products including credit cards has increased by 44 per cent.

Over the last year ANZ customers have faced an avalanche of increased fees on credit cards. Some of the fee hikes include:

• Annual fees on ANZ credit cards rising between 15 and 40 per cent. • Late payment and overlimit fees on credit cards rising to $35 - up 40 per cent. • Currency conversion rates on credit cards tripling from 0.5 per cent to 1.5 per cent

The banks are finding new ways of gouging fees and charges from consumers.

Without formal scrutiny fees and charges will continue to soar.

For too long the Treasurer has ignored the fee gouging that has occurred at the expense of Australian consumers.

A Labor Government would formally direct the ACCC to monitor bank fees and charges to provide a check on fee increases by the banks.

For further information please contact: Stephen Conroy: 0418 383 965

Alan Griffin: 0419 353 476