[LINK] OzIT: 'ASIC in call for extended EFT code'
Roger.Clarke at xamax.com.au
Tue Oct 7 09:54:50 EST 2008
ASIC in call for extended EFT code
The Australian IT Section
October 07, 2008
THE electronic funds transfer code of conduct should be expanded to
cover all payments initiated from mobile phones, prepaid cards and
e-toll tags, a draft report recommends.
The Australian Securities and Investment Commission proposes revising
the EFT code to cover all electronic funds transfers by individuals,
including telephone banking, direct debits, online billing facilities
and wireless-based systems.
"Because most mobile payment services are not regulated elsewhere, it
is appropriate that the EFT code cover them," ASIC said. "We consider
that the code covers BPay transactions, and we will amend it to
The consultation paper warns that compulsory compliance with the code
may be sought if non-traditional financial services providers fail to
sign up voluntarily.
[Media Release at
[Consultation Paper at
"Businesses offering newer products - retailers issuing gift cards,
mobile-phone operators providing third-party payments and transit
authorities - have not yet subscribed," ASIC said.
"Arguably, these businesses are in direct competition with bank and
financial institution subscribers, yet they avoid the compliance
costs associated with membership.
"Making the code mandatory would establish a more level playing field
in this market."
The paper, released last Friday after a lengthy review of the EFT
code announced in January 2007, recommends widespread changes.
ASIC plans to redraft the code in plain English and adopt a simpler,
It also supports extending the code's protection to small businesses,
and will introduce tougher complaint-handling rules.
ASIC said there was no need to increase the present no-fault
liability limit of $150 in the event of unauthorised transactions on
a consumer's account, but it planned to address the issue of mistaken
payments if people accidentally paid the wrong party through
incorrect entry of an account number.
"We are mindful that financial institutions have encouraged consumers
towards online forms of payment," ASIC said.
"This has created considerable savings for the institutions, but has
removed protection for consumers and created new risks for them.
"In practice, it is extremely difficult for consumers to recover
"The consumer will not generally know the identity of the person they
have paid by mistake."
ASIC is planning a round table to establish a means of recovering
money from mistaken transactions without the consumer having to take
legal action against the unintended recipient.
The paper proposes dropping the requirement for members to file
annual compliance reports, in favour of more regular reviews.
"Our view is that the most productive use of everyone's resources is
for monitoring to focus on specific areas - either because problems
are suspected or because they are particularly important - rather
than attempting a comprehensive but probably more superficial
review," it says.
ASIC is seeking comment on the draft code by December 5.
Roger Clarke http://www.anu.edu.au/people/Roger.Clarke/
Xamax Consultancy Pty Ltd 78 Sidaway St, Chapman ACT 2611 AUSTRALIA
Tel: +61 2 6288 1472, and 6288 6916
mailto:Roger.Clarke at xamax.com.au http://www.xamax.com.au/
Visiting Professor in Info Science & Eng Australian National University
Visiting Professor in the eCommerce Program University of Hong Kong
Visiting Professor in the Cyberspace Law & Policy Centre Uni of NSW
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