The great credit card swindle (part two)
My questions to the Commerce Commission were as follows:
1. Why is the ASB required to pay its customers only “a pro rata portion of the currency conversion fees” paid during the period, and not the whole amount?
2. Why has it been made the responsibility of the customer to pursue the breakdown of fees? (ASB’s initial letter to each affected customer neither explains what the exact settlement with the Common Commission has been, nor does it go into detail about why the total compensation due to customers is such a small proportion of the amount paid — in my case less than 20 percent of the fees.)
3. Since the bank breached the Act by failing to adequately disclose its currency conversion fees on overseas credit card transactions, isn’t it now the bank’s responsibility to fully disclose the settlement with clear information to each affected customer, without requiring customers to search out five-year-old statements and tally up old transactions?
4. What is the Commerce Commission doing to ensure that the agreed compensation settlement is adequately and correctly distributed to affected customers?
The official release about the case is here. But to paraphrase the Commerce Commission’s response to my questions (and it would be unfair to quote Sebastian Bishop here, since he only conveyed Commission policy to me), the ASB’s breach was not that it had charged these offshore service margins but that it didn’t adequately disclose them. That’s why the ruling only requires the bank to compensate its customers a pro rata portion of the fees they paid. Third party auditors will apparently be assessing the ASB’s execution of the court ruling. The Commerce Commission itself is not involved in the compensation side of the judgment. The bank’s original breach related to an “action of trade”; however, the bank’s letter of regret to its customers about the settlement does not represent an action of trade and therefore whether the ASB make a full disclosure to its customers is of no concern to the Commerce Commission. As far as it is concerned, the matter is closed. It won’t be taking it any further.
This means the customer’s only recourse is to the law — to take the matter of the handling of the compensation payout back to the courts. More expense and the granting of more time to the ASB in which to earn interest on the fees it hasn’t reimbursed its customers. If there were enough dissatisfied customers and a lawyer willing to take on their grievance on a pro bono basis, action might be an option. The ASB has had its slap on the wrist and now considers itself off the hook. A risk assessment into the likelihood of such a ruling being taken further by customers may have found that continued obfuscation was the best policy.
Personally, I don’t think the ruling was strictly enough defined. The auditors should also have been tasked with making sure the bank disclosing exactly how the compensation was calculated on each transaction, not some half-assed “pro rata portion”. The way it is, the customer gets shafted while the bank pays lip service to a ruling that only appears to have forced it to regret having been caught. After all, the bank does not apologise to its customers in its letter; the implicit message being that regret about having to pay back less than 20 percent of the fees paid is apology enough for misleading its customers.
1. Why is the ASB required to pay its customers only “a pro rata portion of the currency conversion fees” paid during the period, and not the whole amount?
2. Why has it been made the responsibility of the customer to pursue the breakdown of fees? (ASB’s initial letter to each affected customer neither explains what the exact settlement with the Common Commission has been, nor does it go into detail about why the total compensation due to customers is such a small proportion of the amount paid — in my case less than 20 percent of the fees.)
3. Since the bank breached the Act by failing to adequately disclose its currency conversion fees on overseas credit card transactions, isn’t it now the bank’s responsibility to fully disclose the settlement with clear information to each affected customer, without requiring customers to search out five-year-old statements and tally up old transactions?
4. What is the Commerce Commission doing to ensure that the agreed compensation settlement is adequately and correctly distributed to affected customers?
The official release about the case is here. But to paraphrase the Commerce Commission’s response to my questions (and it would be unfair to quote Sebastian Bishop here, since he only conveyed Commission policy to me), the ASB’s breach was not that it had charged these offshore service margins but that it didn’t adequately disclose them. That’s why the ruling only requires the bank to compensate its customers a pro rata portion of the fees they paid. Third party auditors will apparently be assessing the ASB’s execution of the court ruling. The Commerce Commission itself is not involved in the compensation side of the judgment. The bank’s original breach related to an “action of trade”; however, the bank’s letter of regret to its customers about the settlement does not represent an action of trade and therefore whether the ASB make a full disclosure to its customers is of no concern to the Commerce Commission. As far as it is concerned, the matter is closed. It won’t be taking it any further.
This means the customer’s only recourse is to the law — to take the matter of the handling of the compensation payout back to the courts. More expense and the granting of more time to the ASB in which to earn interest on the fees it hasn’t reimbursed its customers. If there were enough dissatisfied customers and a lawyer willing to take on their grievance on a pro bono basis, action might be an option. The ASB has had its slap on the wrist and now considers itself off the hook. A risk assessment into the likelihood of such a ruling being taken further by customers may have found that continued obfuscation was the best policy.
Personally, I don’t think the ruling was strictly enough defined. The auditors should also have been tasked with making sure the bank disclosing exactly how the compensation was calculated on each transaction, not some half-assed “pro rata portion”. The way it is, the customer gets shafted while the bank pays lip service to a ruling that only appears to have forced it to regret having been caught. After all, the bank does not apologise to its customers in its letter; the implicit message being that regret about having to pay back less than 20 percent of the fees paid is apology enough for misleading its customers.
posted by Chris Bell at 11:27 AM
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