ASIC has announced it has started legal action in the Federal Court against consumer credit provider GE Money, seeking financial penalties against the company for making false or misleading representations.

ASIC contends that GE Money represented to customers, over the telephone and by letter, that they had to give GE Money consent to send them unsolicited credit limit increase offers before it would activate their credit card or give them a credit limit increase.

ASIC alleges that in fact, cardholders could still activate their credit cards or obtain credit limit increases without giving consent to receive unsolicited offers.

Section 133BE of the National Consumer Credit Protection Act prohibits a credit provider from making an unsolicited written offer to increase a customer’s credit card limit unless the credit provider obtains the customer’s consent before sending an offer under section 133BF.