Changes to consumer credit laws
On 1 July 2010, the Australian Securities and Investments Commission (ASIC) became the national regulator for consumer credit. This means that home loans, personal loans, credit cards, consumer leases, overdrafts and line of credit accounts, among other products and services, are regulated under Commonwealth legislation and administered by ASIC. New Commonwealth laws also require all credit providers and finance brokers to be licensed.
On 1 July 2013, NSW cancelled its maximum percentage rate law. This means that the maximum cost rate for consumer credit contracts across Australia – including NSW - is set under the National Credit Code. Visit the ASIC website for more information about the new regulatory framework and the maximum cost rates.
Disputes and complaints
If you have an issue with a credit product or service, you should go straight to your credit provider’s independent dispute resolution scheme. If your credit provider belongs to the Credit and Investments Ombudsman (CIO) call 1800 138 422 or visit www.cio.org.au
If your credit provider belongs to the Financial Ombudsman Service (FOS) or you are unsure, call 1800 367 287 or visit www.fos.org.au
Complaints about a finance broker’s illegal or unfair conduct for contracts entered into after 1 January 2011 should be directed to ASIC online or call the ASIC’s Infoline on 1300 300 630.
Complaints about a finance broker for contracts entered into before 1 January 2011 should go to NSW Fair Trading.
Credit card chargebacks
What is a chargeback?
A chargeback is a reversal of a charge on your credit card, or debit card (when you select 'credit'). It takes place between your bank and the business’ bank and happens when the business’ bank agrees to return funds back to your bank after a chargeback request.
Common circumstances when chargeback applies
There is no guarantee you will get a chargeback. The most common examples for when chargebacks apply include:
- goods or services delivered are not as described
- non-supply or non-receipt within the agreed time frame
- duplicated or fraudulent transactions
- charges are made without your permission
- insolvency - the trader you purchased goods or services from stops operation and you did not get what you paid for
- unrecognised transactions.
The chargeback process is separate from other dispute resolution services like those available through eBay or PayPal. You may also have a right to a chargeback for PayPal purchases if your credit card is linked to your PayPal account, and PayPal’s dispute resolution process was unsuccessful.
When chargeback is not an option
There are some circumstances when a chargeback may not be available. For example, if you:
- selected 'cheque' or 'savings' as the account type on a debit or EFTPOS card
- paid with cash, money transfer, cheque, direct debit or BPAY
- are eligible to lodge an insurance claim
- have already been compensated.
There are time limits for card issuers to submit chargeback claims. Time limits vary and can be anywhere between 45 and 120 days from:
· the transaction processing date - where the goods or services were immediately available; or
· the last date that the cardholder expected to receive the goods or services - where the goods or services were to be provided after the transaction processing date.
Consumers' right to complain
If you’re not satisfied with your card issuer’s decisions on a chargeback, you have the right to raise a complaint with the Financial Ombudsman Service (FOS). FOS provides free and independent dispute resolution help to individuals and small business owners who are unable to resolve complaints with their financial service providers.