[LINK] OzIT: 'ASIC in call for extended EFT code'
Marghanita da Cruz
marghanita at ramin.com.au
Tue Oct 7 10:21:57 EST 2008
I confess to catching something that seems related to this story on one of the
The story claimed that the bank, in question, didn't validate the destination
account name against the account number, for a netbanking payments....Sounds a
bit like offering the option to cancel, but ignoring the selection.
Roger Clarke wrote:
> ASIC in call for extended EFT code
> The Australian IT Section
> Karen Dearne
> 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
> clarify this."
> 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,
> technology-neutral concept.
> 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
> mistaken payments.
> "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.
Marghanita da Cruz
Phone: (+61)0414 869202
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