Submission - Joint response to the Review of the Electronic Funds Transfer Code of Conduct (2008)

Proposal B3

B3Q1 Do you agree with this proposal? Please give reasons.

We propose to:

(a) redraft the EFT Code to cover all electronic funds transfer transactions initiated electronically;

(b) include a non-exhaustive list of examples of the transactions the EFT Code covers;

(i) cheque transactions; and

(ii) card transactions, where the payment instruction is intended to be authenticated by comparing the consumer’s manual signature with a specimen signature.

B3Q1 Do you agree with this proposal? Please give reasons.

ASIC has proposed that the Code be redrafted to apply to ‘all electronic funds transfer transactions initiated electronically’. This is a very broad definition and it is supported by consumer stakeholders. However, consumer stakeholders believe that the exact coverage of credit cards should be clarified.

ASIC has also included a non-exhaustive list of on-exhaustive list of examples of transactions covered by this definition, and this list only includes one category of credit cards:

Credit card transactions that are intended to be authenticated by an electronic signature, including by entering a PIN and by signing an electronic tablet;

This definition of credit card transactions would not appear to cover the numerous transactions that occur over the phone and Internet (and via email) where there is no PIN or ‘electronic’ signature. In these transactions the consumer typically just provides name and address details and the credit card number and expiry date. Sometimes a security code is required (e.g. the card verification number from the back of the card). But in the majority of cases no additional information is provided.

As this category of transactions represents an enormous proportion of all electronic funds transfers, consumer stakeholders want to ensure that it is included. It is possible that this category is already included in the broad definition of electronic funds transfers as the transfer is initiated electronically, and it clearly falls outside the ‘negative’ definition for credit cards that require comparison with a specimen signature. However, to ensure absolute certainty, this category should be added to the list of examples of transactions covered by the definition. The proposed form of words for this second category of included credit card transactions is:

Credit card transactions that are initiated electronically but do not make use of a secret or non-secret code, password, or electronic signature.





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