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

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Q73 – Are there other issues not covered in this consultation paper that the review should address?

• Technology neutrality
• Financial hardship

Consumer stakeholders wish to raise two additional issues:

Technology neutrality

Technology neutrality is a core concern in the EFT Code. Consumer stakeholders support a technology neutral approach in the Code to ensure that the Code is able to keep up with developments in EFT technology.

Unfortunately the text of the Code is struggling to address developments in the EFT sector. The key area of concern is the complex use of the following terms and their inter-relationship in the Code text:

• Electronic equipment;
• Device;
• Identifier; and
• Code.

At different points in the Code the use of each of these terms results in a specific liability outcome. However, there are now so many ways to provide instructions for an electronic funds transfer or to access and account that these terms may not adequately cover all circumstances. If they do cover all circumstances, the use of these terms may result in unexpected liability results.

These terms may need to be reviewed to ensure technology neutrality is maintained. One issue here is that modern access methods now include two factor authentication approaches resulting in a plethora of new devices – smart cards, one-time password generators, mobile phones, USB tokens – all of which might play a role in providing access.

As a result, some of the definitions (e.g. device and electronic equipment) may need to be reviewed for technology neutrality. Some initial observations show the complexity of these definitions in practice:

• A mobile phone is currently defined as both a device and electronic equipment.
• The definition of code means that it must be known to the user, but modern codes (e.g. one-time passwords) are generated by devices and only ‘known’ to the consumer for a short period if at all.

It may be useful to conduct a thorough Technology Neutrality Review of the definitions in the Code once other clauses are agreed in the Review process. 

Financial hardship

In addition, the parties to this submission have read and endorse the recommendations on financial hardship contained in the Consumer Caseworker Submission. In particular their comments below:

Members appear to need to be pushed to consider the financial and medical circumstances of consumers. Consumer law organisations would like to see a mirroring of the s 25(2) of the Code of Banking Practice which requires members to make allowances for financial difficulty. Such provisions need to be introduced in the EFT Code, as it covers a much greater member base than just banks.

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