Australian Securities and Investments Commission (Fair Trade and Credit Card Fees) Amendment Bill 2007

No. , 2007

(Senator Fielding)

A Bill for an Act to amend the Australian Securities and Investments Commission Act 2001 to limit unfair banking and credit card penalty fees, and for related purposes

Contents

A Bill for an Act to amend the Australian Securities and Investments Commission Act 2001 to limit unfair banking and credit card penalty fees, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Australian Securities and Investments Commission (Fair Bank and Credit Card Fees) Amendment Act 2007.

2 Commencement

This Act commences on the day on which it receives the Royal Assent.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendment of the Australian Securities and Investments Commission Act 2001

1 After Subdivision E of Division 2 of Part 2

Insert:

Subdivision F—Penalty fees

12FA Penalty fees if customer cannot control liability

(1) A person must not, in connection with the supply or possible supply of financial services, impose a fee, penalty or charge of any kind on a customer in consequence of a failed transaction if the customer had no actual or constructive knowledge that the transaction would fail.

(2) Without limiting the generality of subsection (1), an example of a failed transaction where the customer had no actual or constructive knowledge that the transaction would fail is the presentation in good faith by a customer of a cheque which is then dishonoured.

(3) Any provision of any contract which purports to allow a fee, penalty or charge which would contravene subsection (1) is void.

12FB Penalty fees to be reasonable estimate of loss

A person (the supplier) must not, in connection with the supply or possible supply of financial services, impose a penalty fee on a person or corporation to whom the financial services are supplied, or are to be supplied (the consumer), unless the penalty fee represents a reasonable estimate of the loss suffered by the supplier as a result of the conduct by which the consumer incurs the penalty fee.

12FC Enforceable undertakings

(1) ASIC may accept a written undertaking given by a supplier of financial services in connection with the imposition of penalty fees.

(2) Without limiting the generality of subsection (1), such an undertaking may include provisions relating to:

(a) the maximum amount of a penalty fee; and

(b) the maximum total penalty fees to be imposed on a consumer in a year.

(3) The supplier of financial services may withdraw or vary the undertaking at any time, but only with ASIC’s consent.

(4) If ASIC considers that the supplier of financial services has breached any of the terms of the undertaking, ASIC may apply to the Court for:

(a) an order directing the supplier of financial services to comply with that term of the undertaking; or

(b) any order that the Court considers appropriate directing the supplier of financial services to compensate any person who has suffered loss or damage as a result of the breach; or

(c) any other order that the Court considers appropriate.

(5) ASIC must keep a record of the full text of the undertaking.

(6) ASIC must make available to a person who asks for it a copy of the text of the undertaking, but ASIC must delete from the copy information:

(a) that the supplier of financial services has asked it not to release; and

(b) that ASIC is satisfied:

(i) is commercial in confidence; or

(ii) should not be disclosed because it would be against the public interest to do so; or

(iii) consists of personal details of an individual.

(7) If ASIC makes available a copy that has information deleted from it, the copy must include a note stating that information has been deleted.

12FD Saving provisions

(1) Nothing in this Subdivision is to be taken to exclude the right of a party to approach a court of equity for relief under the doctrine of penalties, as it exists within the unwritten law, from time to time, of the States and Territories.

(2) Nothing in this Subdivision is to be taken to exclude the right of a party to take enforcement action under Subdivision G of this Division, in relation to conduct which contravenes a section of this Subdivision.

2 Subsection 12GF(1)

After “Subdivision D (sections 12DA to 12DN)”, insert “or Subdivision F (sections 12FA to 12FD)”.

Then, the main thing to do will be to force legislation to be passed regulating interest rates and other, non – penalty, fees and charges, so that they are reasonable, not excessive, and so that any variations have to be approved by ASIC before they can be introduced.

 

. john.curtis1951@yahoo.com .