EFT Code update

In October 2008, ASIC released its second consultation paper on the review of the Electronic Funds Transfer Code of Conduct (EFT Code).

Its report is expected to be issued soon.

The EFT Code applies to credit cards (other than those authorised by manual signature) and non-cash (including digital) payment facilities such as direct debit, ATM, EFTPOS, Internet banking, stored value/prepaid cards, telephone/IVR banking and BPAY.

What changes can we expect ? Apart from drafting and procedural changes to reflect technology changes, ASIC is expected to announce its attitude to resolution of disputes relating to mistaken electronic payments. These are not currently covered by the EFT Code.

For example, what happens when an online funds transfer (eg pay anyone) is credited to the wrong financial institution account (ie an account with a different account owner or account number than intended because the customer keyed in the wrong account number or because they have been given the wrong account number). I discussed the Banking and Finance Ombudsman’s approach here.

The current difficulty is the lack of a simple agreed method of recovering mistaken payments. ASIC has said it does not intend to create new legal rights that do not currently exist. It also acknowledged the potential for abuse and fraud.

Should any new procedure be limited to keying in errors or extend to payments where the wrong details have been selected (eg from a drop down pay anyone list). Will it exclude disputes over the quality of goods or services purchased online?

Other changes will cover the requirement for receipts and complaints handling. ASIC is also considering extending the Code to small businesses.

Print Friendly, PDF & Email

Your Compliance Support Plan

We understand you need a cost-effective way to keep up to date with regulatory changes. Talk to us about our fixed price plans.