Submission - Joint submission to the 2007 Review of the Electronic Funds Transfer (EFT) Code of Conduct to ASIC (May 2007)

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Q38 – Is there a case for increasing the current ‘no fault’ amount of $150? If so, on what basis and what should the new amount be?

Consumer stakeholders oppose any further change to the no fault liability regime in this Review of the Code. The last Review resulted in an enormous increase in the amount of the no-fault payment from $50 to $150 despite the objections of consumer stakeholders. This increase occurred despite continued record profits for financial institutions and record growth in fee income.

The fee should not be used as a negotiating instrument in each Review of the EFT Code. It is a regressive fee that has a disproportionate impact on low income and disadvantaged consumers. Financial institutions and their representatives can sometimes be disconnected with the financial position of low income consumers. It may be necessary to remind all stakeholders that $150 is more then the weekly payment for Youth Allowance, ABSTUDY and Rent Assistance and is close to the average weekly payment for most pensioners and job-seekers.

The other provisions in the EFT Code need to stand on their own merits and the current $150 no-fault payment should be maintained or reduced. It is already a significant payment in circumstances where the consumer may not be at fault, and it already acts as a strong incentive for improving consumer behaviour. 

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