Credit card campaign triggers ASIC intervention
(8 March 2012 – Australia) A misleading campaign has had to be pulled by Commonwealth Bank of Australia (CBA), after the bank offered to increase credit card limits to around 96,000 internet banking customers.
The Australian Securities and Investments Commission (ASIC) found CBA has had to promise not to use any of the misleading advice to raise the credit card limits of customers, an undertaking which could be enforced.
Laws will come into force in July that prohibit card issuers from sending unsolicited credit limit increase invitations to their customers unless the customer has consented.
In December last year CBA sent messages through its internet banking platform to customers notifying them of the changes to the law regarding credit limit increase invitations.
At the same time CBA requested that customers provide their consent to continue to receive invitations to increase their credit limit.
ASIC formed the view that the messages were misleading because they suggested that if CBA’s customers did not complete the consent form, they would lose the chance to receive credit limit increase offers.
ASIC also found the offer also suggested CBA’s customers would miss out on opportunities to access extra funds should they need them.
Under the new laws, customers can provide or withdraw their consent at any time. In addition, customers can request a credit limit increase from their financial institution at any time.
As part of the enforceable undertaking, CBA has said it would not rely on the consents obtained from customers from the campaign. At the same time CBA has promised to contact every customer who consented to the increase ‘‘to correct any misleading impression’’, ASIC said in a statement.
Laws will come into force in July that prohibit card issuers from sending unsolicited credit limit increase invitations to their customers unless the customer has consented.
In December last year CBA sent messages through its internet banking platform to customers notifying them of the changes to the law regarding credit limit increase invitations.
At the same time CBA requested that customers provide their consent to continue to receive invitations to increase their credit limit.
ASIC formed the view that the messages were misleading because they suggested that if CBA’s customers did not complete the consent form, they would lose the chance to receive credit limit increase offers.
ASIC also found the offer also suggested CBA’s customers would miss out on opportunities to access extra funds should they need them.
Under the new laws, customers can provide or withdraw their consent at any time. In addition, customers can request a credit limit increase from their financial institution at any time.
As part of the enforceable undertaking, CBA has said it would not rely on the consents obtained from customers from the campaign. At the same time CBA has promised to contact every customer who consented to the increase ‘‘to correct any misleading impression’’, ASIC said in a statement.
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