[LINK] Assault on Consumer Protection on the Net

[Alan L Tyree]

On Fri, 13 Apr 2007 11:09:42 +1000
Marghanita da Cruz <marghanita at ramin.com.au> wrote:

> Alan L Tyree wrote:
> > On Thu, 12 Apr 2007 12:00:16 +1000
> > Howard Lowndes <lannet at lannet.com.au> wrote:
> > 
> > 
> >>
> >>Roger Clarke wrote:
> >>
> >>>The Australian Securities and Investments Commission (ASIC) is 
> >>>undertaking a Review of the Electronic Funds Transfer Code of
> >>>Conduct:
> >>>http://www.asic.gov.au/asic/asic.nsf/byheadline/Review+of+the+Electronic+Funds+Transfer+Code+of+Conduct+2007?openDocument 
> >>
> >>I went to this site and found approx 6 submissions, but none were 
> >>submissions from any industry players and hence there is no 
> >>demonstration of the assertions made below.  Where are the industry 
> >>submissions that are encouraging change to the EFT?
> > 
> > 
> > The deadline has been changed to the end of April at the request of
> > various "shareholders". So you are unlikely to see any industry
> > submissions until the very end.
> > 
> <snip>
> The scope is pretty broad mentioning PAYPAL, Octopus Card and
> presumeably  E-TAGS on motor ways etc......as well as Telephone
> transactions.
> 
> It was interesting to note, that the submissions from the Family
> Business Association wanted the code to become compulsory.
> 
> Roger there seemed to be a lot of discussion about Telephone Payments,
> EFTPOS and Direct Debit - not so much about Internet banking.
> For my part I don't think userid/passwords are sufficient. There was a
> reference in the discussion paper about the ABA's Authentication
> policies. Don't you believe these to be strong enough?
> 
> The current opportunity to dispute transaction on credit cards prior
> to payment and an interest free period, make them much more secure
> than bank accounts.

Yes and no. There is a glitch with credit cards that needs to be fixed.
Some merchants (fitness gyms are major offenders here) use credit card
accounts as a replacement for the normal direct debit arrangement.

The customer signs an authority for the credit card account to be
debited each month. The "glitch" is that the banks will not act on a
countermand to that order. It is left to the customer to make
arrangements with the merchant to get the debits stopped.

You can imaging how well that works.

The situation is different with direct debits. After an initial period
of bloody-mindedness, the Code of Banking Practice was amended to give
the customer the right to countermand the direct debit by direct
instructions to their bank.

It was a right which, in my view, was legally theirs in the first
place, but legal rights of consumers are sometimes very difficult to
enforce. Without the means of enforcement, the rights can be trampled
with impunity.

By incorporating the right into the Code, the consumer can now enforce
it through the Banking and Financial Services Ombudsman.

Alan
> 
> Is there any suggestion of this changing? If it did, I would cancel my
> credit card but would not use my bank account instead. I have had
> problems with a Direct Debit Authority and Internet Fraud on my credit
> card but both
> times, the ISP  and the bank respectively alerted me, before I saw the
> transactions on my bill.
> 
> There was still a lag in the reversal of the transactions - but this
> wasn't a cost to me.
> If it was on my bank account it would have been in which case, an
> issue of interest/lack of access to funds becomes an issue. There has
> to be some kind of penalty and incentive for something to happen.
> 
> It should be noted that the issue of penalty/incentive to fix the 
> problem is not necessarily different from non-electronic related
> errors 
> - such as calculation of Interest on bank accounts/home loans etc.

> 
> Marghanita
> -- 
> Marghanita da Cruz
> http://www.ramin.com.au/
> Telephone: 0414-869202
> Ramin Communications Pty Ltd
> ABN: 027-089-713-084
> 
> 
> 
> 
> 
> 


-- 
Alan L Tyree                    http://www2.austlii.edu.au/~alan
Tel: +61 2 4782 2670            Mobile: +61 427 486 206
Fax: +61 2 4782 7092            FWD: 615662