Sydney, 7 July, 2006: The Australian Bankers’ Association (ABA) is supporting the Australian Securities and Investments Commission (ASIC) education campaign to improve book up practices in regional and remote communities.

‘Book up’ involves the store owner offering small amounts of short-term credit that is often secured by the consumer leaving their debit card and Personal Identification Number (PIN) with the business owner or having their social security cheque posted care of the store. It is common in remote communities in Australia, mainly Indigenous communities.

As part of NAIDOC week¹, today ASIC is launching a booklet - ‘Dealing with book up: key facts’ which is a resource for communities and businesses. It includes information and practical tips about financial issues in Indigenous communities, including the importance of keeping your PIN confidential. The ABA and the Department of Consumer and Protection, Western Australia, helped fund the education campaign.

Australia’s retail banks have been assisting ASIC and the Northern Territory Government to reform the book up practices.

David Bell, Chief Executive of the ABA, said: “Banks did not want an immediate ban of book up because this facility at a local store could be the only access to credit or cash for some distance, but we are interested in reforms which produce better consumer protection.”

“Some banks have now changed their EFTPOS merchant agreement contracts to h prohibit merchants asking for or holding a customer’s PIN. Other banks are in the process of amending their agreements. These amendments may encourage improved ‘book up’ arrangements when consumers make a purchase and may prevent some of the associated problems.”

“While the debit card may be retained by the store owner, the eventual aim of the changes is to phase out the retention of PINs by merchants; ensuring customers will enter their PIN to complete the transaction. This means that consumers will be less exposed to unscrupulous practices, such as fraud and theft.”

ASIC has found that access to a debit card and/or PIN can be attained by the merchant which increases the potential for fraud and consumers lose the protection of the Electronic Funds Transfer (EFT) Code because they have divulged their PIN.

The ABA believes that poor book up practices should be addressed through a combination of regulation and education which restricts the retention of a customer’s PIN by merchants, imposes disclosure and operational practices on merchants and improves financial literacy skills of Indigenous Australians.

“Many banks have in place financial literacy programs that seek to help people gain the skills and knowledge to better manage their money. Banks are working in a number of cross-sectoral strategies to improve services and access for Indigenous Australians, including those living in remote areas,” Mr Bell said.

The ABA and member banks will be assisting ASIC in distributing the booklet to bank branches, merchants, customers and community representatives in regional and remote Australia. 

Notes for editors:

1. A copy of ‘Dealing with book up: key facts’ or ‘Dealing with book up: a guide’ can be accessed via ASIC’s FIDO website at http://www.fido.gov.au/bookup

2. A copy of the ABA’s submission on the Northern Territory Government discussion paper on book up can be accessed via the ABA website at http://www.bankers.asn.au/

For further information:

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

ENDS

¹NAIDOC celebrations are held around Australia in the first full week in July to celebrate the history, culture and achievements of Aboriginal and Torres Strait Islander people. NAIDOC originally stood for ‘National Aborigines and Islanders Day Observance Committee’. This committee was once responsible for organising national activities during NAIDOC Week, and its acronym has become the name of the week itself.