Murray review response: Excessive credit card fees to be banned

Sid Maher
OCTOBER 20, 2015
THE AUSTRALIAN
The Turnbull government will introduce a progressive ban on excessive credit card fees by the middle of next year.
Releasing its response to the financial system inquiry, the government also promised to do more to lift the quality of financial advice provided to consumers.
The financial inquiry response by Treasurer Scott Morrison and Assistant Treasurer Kelly O’Dwyer, released this morning, will impose a legislative ban on merchants imposing unfair card surcharges that are greater than the cost to them of accepting payment by card.
The legislation is likely to detail what is a “reasonable cost’’ of using a credit card and place a cap which cannot be legally exceeded.
The government’s Payments System Board is currently reviewing interchange fees charged between banks and customer surcharges.
The Australian Competition and Consumer Commission will be responsible for enforcing the new regime.
The measures are in response to the report handed to the government by David Murray on Australia’s financial system.
The government response comes after 11 months of consultations with the industry that included more than 180 submissions.
Promising to do more to lift the standards of financial advisers, the inquiry response promises to put the industry on a professional footing “for the first time’’.
Subject to transitional arrangements advisers will be required to hold a degree, pass an exam, undertake continuous professional development, subscribe to a code of ethics and undertake a professional year before they can advise clients.
The government has promised to tackle fee incentives to financial advisers to plug certain products.
By the end of this year it has promised to “address the misalignment of incentives by reducing and improving the disclosure of conflicted remuneration in life insurance, stockbroking and mortgage broking’’.
Legislation will also be introduced to make issuers and distributors of financial products accountable for their offerings.
The Australian Securities and Investments Commission will get new power to intervene to remove products that are considered damaging.