BANKING INDUSTRY INITIATIVES TARGET DEBT

Sydney, 5 March, 2004:  The Australian Bankers’ Association (ABA) has today announced a range of initiatives to assist bank customers in managing their household finances.

David Bell, Chief Executive of the ABA, said: “The ABA and member banks have been listening to community concerns over problems associated with debt, and today we are announcing initiatives to assist in addressing a number of the concerns about credit card marketing.”

While recognising Australia currently has very low levels of credit default, indicating the vast majority of Australians manage credit well, the banking industry wants to provide improved services where possible. 

These initiatives are:

1.    Banks have agreed to provide information in letters to customers offering increased credit card credit limits, on how much more customers have to pay each month, if they take up the offer. The customer will then easily be able to assess the increased repayments needed if they use the additional credit.

2.    Advice to customers, included in marketing material, that if their personal circumstances have recently changed, for example loss of employment, or are likely to change, for example maternity leave, they should not accept any credit card credit limit increase offer, and should immediately contact their bank.

3.    A capacity for individuals to opt for a lower credit card credit limit than the increase their bank has offered. For example, a customer can opt for a $1000 increase in preference to the $2000 limit increase offered.

4.    An industry benchmark that any ABA member bank customer can reduce their credit card credit limit:

      (a)   If the bank has a telephone facility to do this – within 24 business hours of receipt of request;