ASIC has announced that it is reviewing 13 products from nine issuers as part of its examination of how consumer funds on expired multi or single currency travel cards are dealt with by card issuers, with a particular focus on identifying any unfair contract terms or deficient disclosures. It is also looking at fees charged on travel cards.

In response to ASIC’s concerns, the Commonwealth Bank of Australia (CBA) has agreed to release $2.2 million for approximately 45,000 customers who had money left on expired CBA Travel Money Cards.

CBA has also made changes to all its Travel Money Cards so consumers will not forfeit any funds left on expired cards. Instead, any expired funds will be held by the CBA for three years and, if they remain unclaimed by consumers, will be treated as unclaimed money Under section 69 of the Banking Act 1959: if the balance is more than $500 it will be transferred to the government, if it is less than $500 it will be held by the bank, subject to a claim by consumers.

Before these changes, funds left on CBA Travel Money Cards for 12 months after card expiry could be forfeited to the CBA.

Funds on reloadable cards are generally not protected by the Financial Claims Scheme (FCS). Under the FCS, the Government guarantees deposits up to a cap of $250,000 per account-holder, per authorised deposit-taking institution.

Note: The Commonwealth Consumer Affairs Advisory Council (CCAAC) report on Gift cards in the Australian market discussed the reasons for expiry dates on gift cards.