ABA MEMBER BANKS ASSIST ON ‘BOOK UP’ PROBLEMS IN INDIGENOUS COMMUNITIES

Sydney, 17 November, 2005: Australian Bankers’ Association’s (ABA) member banks will assist the Northern Territory Government and the Australian Securities and Investments Commission (ASIC) to address the issue of ‘book-up’ in Indigenous communities.

The ABA and representatives from member banks have attended the ‘Book Up Forum’ in Alice Springs organised by ASIC and the Northern Territory’s Consumer and Business Affairs which has been held over the last two days.

The practice of ‘book up’ involves the business owner (mainly retailers) offering small amounts of short-term credit that is usually secured by the consumer leaving their debit card and/or PIN with the business owner or having their social security cheque posted care of the store. It is common in rural and remote Australia and the consumers are mainly Indigenous Australians.

At the Forum, the NT Minister for Justice, Dr Peter Toyne, today released a discussion paper on book up. The discussion paper poses a number of options including regulating the provision of credit by business owners by prohibiting the retention of a PIN by business owners.

David Bell, Chief Executive of the ABA, said: “We are pleased to see initiatives by the NT Government and ASIC to educate retailers about the issues associated with book up.”

“Business owners accept cards from their customers in payment for goods and services which they supply to their customers. Banks will seek to encourage more appropriate behaviour by business owners by reviewing the terms and conditions of EFTPOS agreements.”

“Some major banks have already adjusted the terms and conditions of their merchant agreement prohibiting a merchant or business owner from requesting a cardholder, provide a card and/or PIN, and that merchants should only retain a card at the cardholders’ request. ABA member banks have already agreed to review terms and conditions of their merchant agreements in relation to book up practices.”

It is also important that part of a strategy to address issues with book up includes educating members of Indigenous communities about their rights and responsibilities when transacting with business owners. Consumers should know where to report instances of poor book up practices. 

“A number of ABA member banks already have in place financial literacy programs which focus on the particular needs of Indigenous communities. We also support ASIC and the NT Government working with Indigenous communities to raise awareness of book up issues.” 

 “It is important that communities have available information on how to best manage book up and also transition to alternative arrangements.”

“Many rural and remote communities have become reliant on book up as a convenient means of short-term credit and an immediate prohibition without education and support could raise further issues, including exclusion from any form of credit or access to ‘unsafe’ forms of short-term credit.  The broader issue here is the need to transition Indigenous communities to safe and appropriate mainstream financial products and the consumer protections that accompany those products.”

The ABA will prepare a submission on the discussion paper on book up released today by the NT Government.  The ABA is also participating in the Federal Government’s “National Indigenous Money Management Agenda” initiative. The banking industry looks forward to consulting further with governments and regulators on these issues.


For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439

ENDS