New laws 'would not stop unfair credit card fees'
New government legislation to improve consumer rights would not stop credit card companies from imposing excessive fees on their customers, it has been suggested.
Under a national consumer law to be implemented next year, banks and other financial institutions will face tougher rules over unfair contract terms.
Successful prosecutions will be made where credit card providers are found to have failed a fairness test.
Speaking to the Sydney Morning Herald, Nicole Rich, the director of policy and campaigns at the Consumer Action Law Centre, claimed that high fees are often a ’’surrogate for raising the interest rate" and cast doubt on whether the legislation would be strong enough to truly challenge lenders.
’’The [new] law allows you to challenge unfair contract terms but the law isn’t entirely clear about whether this sort of thing is an unfair term," she added.
Ms Rich said Westpac’s recent decision to charge interest on existing credit card interest would encourage Australians to compare credit cards in search of better offers.
This week, a study by the consumer advocate group Choice claimed that Australian credit cards and are failing to meet the more customer-friendly standards that exist in the UK.
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