Australia: ASIC´s Proposals To Amend The EFT Code – Consultation Paper Released

On 3 October 2008, the Australian Securities and Investments Commission (ASIC) released its Consultation Paper 90 "Review of the Electronic Funds Transfer Code of Conduct 2007/08: ASIC proposals". The consultation paper proposes to make amendments to the Electronic Funds Transfer Code of Conduct (EFT Code).

Submissions to the Consultation Paper 90

ASIC is currently reviewing the EFT Code and invites submissions to the proposals in the paper. The proposals are only an indication of the approach that ASIC may take and are not ASIC's final policy. Submissions are due by 5 December 2008. A copy of the consultation paper can be obtained from ASIC's website at: www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/CP-90-Review-of-Electronic-Funds-Transfer-Code-v1.pdf/$file/CP-90-Review-of-Electronic-Funds-Transfer-Code-v1.pdf

Key proposals by ASIC

Structure, scope and membership of the EFT Code:

• EFT Code to include a statement of objectives

• Replace the current two-part EFT Code with one-part structure, with tailored requirements for certain products

• Introduce a simpler, technology-neutral concept for the transactions covered by the EFT Code

• Consider ways to expand the membership of the EFT Code

• Redraft the EFT Code in plain English

• Possible extension to cover small business consumers.

Disclosure requirements:

• Refine the requirements for receipts relating to "opt-in" systems, when a receipt is required and voice transactions

• Clarify the requirements for disclosure of surcharges charged by third party ATMS.

Complaints handling:

• Reflect the introduction of a new Australian Standard on complaints handling

• Clarify the obligation for subscribers to give consumers written information about how they investigate complaints unless the complaint is immediately settled

• Introduce a requirement for subscribers to respond to requests for information from another subscriber within 30 days

• Deal with the situation where a subscriber does not respond to a request by an external dispute resolution scheme for information

• Introduce a limitation period of 6 years for making complaints.

Liability for disputed transactions and mistaken payments:

ASIC proposes to retain the current approach to allocating liability for unauthorised transactions with proposed amendments to –

• Provide that a consumer would be liable for unauthorised transactions that occur because they leave a card in an active ATM which has automatic shut down procedures

• Require subscribers to prohibit merchants from taking consumer's PINs as part of "book up" practices in merchant agreements

• Deal with mistaken payments.

Electronic communications and privacy:

• Amend the requirements for delivering information electronically

• Introduce new requirements for what is printed on receipts to protect consumer's privacy.

Administration and review of the EFT Code:

• ASIC to have a general power to modify the EFT Code

• EFT Code to be reviewed every five years

• ASIC to monitor compliance with specific requirements of the EFT Code, including a requirement for subscribers to provide certain information on unauthorised transactions.

ASIC's timeframe for review process

How can you benefit from this review?

You should read the consultation paper to see how it affects your business. You can contribute to the revised version of the EFT Code by making submissions now! Please contact us if you require our assistance in making a submission.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.