ASIC has released Report 218 Electronic Funds Transfer Code of Conduct Review: Feedback on CP 90 and Final Positions, which summarises the outcome of the recent review of the Electronic Funds Transfer Code of Conduct (EFT Code).
The EFT Code is the voluntary code that provides protection for consumers who use electronic means for making payments (including ATMs, EFTPOS, credit cards, online payments, internet banking and BPAY). The code provides key consumer protections in cases of fraud and unauthorised transactions.
The report sets out ASIC’s final policy position on various issues including:
- modified EFT Code requirements will apply to low value products (with a maximum balance of $500)
- allowing electronic delivery of code-disclosures where consumers agree (eg notices of changes to fees and periodic statements)
- a new regime to resolving mistaken ‘internet banking’ payments.
Disclosure
The revised Code will:
(a) state that both opt-in and opt-out receipt systems comply with the EFT Code;
(b) clarify that a subscriber must take reasonable steps to provide a receipt (and need not provide a receipt where it is not reasonably practicable to do so); and
(c) permit a receipt for a voice transaction to specify a reference number rather than the merchant’s name, where the invoice from the merchant to the consumer includes their name and the number.
The revised EFT Code will state that disclosing the merchant’s name in receipts is considered best practice.
The revised Code will retain the current requirements for notifying changes to fees and charges.
Individual notification can be delivered using a variety of methods, including electronic communication where the customer has given consent to receive information this way.
Unauthorised transactions and mistaken payments
The revised EFT Code will:
• provide that a consumer is liable for unauthorised transactions when they leave a card in an active ATM;
• require subscribers to prohibit merchants from taking consumers’ PINs as part of book up arrangements; and
• specify funds recovery procedures for mistaken internet payments.
ASIC’s proposed regime for mistaken payments includes:
- preventative measures;
- recovery where there are sufficient funds;
- recovery where there are not sufficient funds;
- role of EDR schemes; and
- administration of mistaken payments arrangements.
Timetable
ASIC is currently redrafting the EFT Code to take into account the final policy positions set out in the report. The revised code will be in plain English. ASIC anticipates releasing the revised code in mid-2011. The revised code will commence after an appropriate transition period.
