Events Highlight Credit Card Risks and Penalties

Thursday, November 1, 2012, AM | Leave Comment

As Australia’s credit card debt continues to be of concern, financial experts highlight the dangers we put ourselves at risk of, for the sake of convenience.

Credit card and internet security have recently made local and international headlines while the battle between the IMF and ANZ puts the spotlight on the exorbitant fees customers are being levied on their credit card accounts.

Research conducted recently by PayPal has found that the Australian public is reckless with their online passwords and financial information. In the survey that was conducted across 1000 participants it was found that 65% were more careful with their ATM pins than with protecting their financial information passwords even though so many more people are using the internet for online shopping.

It’s understandable when you consider we’ve had more than 30 years to get accustomed to ATMs and their requisite safety procedures but locals need to start applying the same principals to their digital wallets as well.

There are currently 4.7-million Australians who use a digital wallet and both credit cards and internet fraud occurrences have hit the local population hard lately. The lure of the digital wallet is its convenience; by storing financial information it gives you quick and easy access to the world of online transaction.

The PayPal survey was carried out on 1,000 people and found that 87% were confident that their passwords could not be guessed even though 22% said they used personal details in their passwords.

The results of the survey have resulted in calls for caution to be exercised, in the interests of consumer protection and the spate of online and credit card fraud that has cost millions of dollars.

First off, in order to make sure they are benefiting the most from their credit card product of choice, all consumers should do as we did for research purposes, and access an online comparison tool, at http://www.bankwest.com.au/personal/credit-cards/compare-credit-cards.

Then, they should protect themselves by ensuring that each of their online accounts has a different password and that passwords do not incorporate any of their personal details, numbers or names.

People using the internet for online transactions are also recommended to change their passwords on a regular basis and not to share them with anyone else.

You are also urged to make sure that desktops, laptops and mobile devices do not store the information for future use, to ensure that no one has unlawful access to your account.

In what could turn into a very interesting scenario the Australian High Court has upheld the rights of customers to continue with their claim against what are alleged to be illegal bank fees attached to credit card accounts that incurred late payments.

The first suit has been filed against ANZ Banking Group by IMF Australia, the country’s biggest litigation funder and has been given the green light to continue with its plans to sue 12 other banks for the same offence.

IMF, which already has 249,000 account registered, is trying to recoup $5-billion in late fee credit card charges since November 2005, for what they interpret to be illegal.

In December 2009 ANZ got rid of 27 different fees that were levied against personal accounts in the interests of reducing the costs of payments that were dishonoured, accounts that were overdrawn and credit card accounts that were being paid late.

Now that the case against ANZ has been given the go ahead the subsequent suits will be filed against each of the other 12 banks.

When the case against ANZ gets to Court the banks will need to be able to convince the judge that fees like $29.50 for overdrawn accounts and $45 for dishonoured payments were reasonable in relation to the costs that were generated as a result. 40% of ANZ’s $50-million refund project is comprised of credit card late payment fees.

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