InfoCast - FAQs

What regulations are changing regarding the provision of Credit Card Key Facts Sheets?

The National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011 contains additional rules that apply to credit licensees that are credit providers under credit card contracts.

They are set out in the National Consumer Credit Protection Amendment Regulations 2011 (No.6) which were registered on 7 November 2011. These can be viewed at http://www.comlaw.gov.au/Details/F2011L02260.

What are the key changes lenders need to be aware of?

The changes will:

• insert new restrictions on a licensee approving the use of a credit card in excess of the credit limit for the credit card contract.
• require credit card providers to allocate repayments to higher interest debts first.
• prohibit a licensee making a credit limit increase invitation unless expressly consented to by the consumer, subject to a transitional provision.
• require lenders to inform consumers about the implications of only making minimum repayments through a personalised minimum repayment warning on monthly statements.
• require a consumer is provided with, or given access to, a Key Facts Sheet before entering into a credit card contract. If a consumer applies to a licensee for a credit card contract under which the licensee would be the credit provider, the licensee must not enter into, or offer to enter into, the contract unless the application is made using an application form that includes a Key Facts Sheet for the contract that contains up-to-date information. But entry by a licensee into a contract without an up-to-date Credit Card Key Facts Sheet having been provided to the borrower will not be a strict liability offence.

Lenders will be permitted to seek and obtain consents from consumers to receive credit limit increase invitations prior to 1 July 2012 so they can rely on those consents for the purpose of making an unsolicited credit limit offer after commencement.

The consumer may withdraw the consent at any time.

A licensee must keep a record of consents the licensee obtains and withdrawals of such consents.

The Regulations require a licensee who is the credit provider under a credit card contract to notify the consumer not later than 2 business days after the day on which the licensee becomes aware that the consumer has used the card in excess of the credit limit for the contract unless the consumer pays the excess within 2 business days and the credit provider has not already issued the notice.

If a credit card is used to obtain cash, goods or services in excess of the credit limit for the credit card contract, the licensee who is the credit provider under the contract is prohibited from imposing any liability to pay fees or charges, or a higher rate of interest, on the consumer who is the debtor under the contract because the credit limit was exceeded unless:

• the licensee has obtained express consent from the consumer covering the imposition of the fees or charges, or the higher rate of interest; and
• the consent has not been withdrawn.

Source: Langes website.

Do they apply to debit cards with attached overdrafts or lines of credit?

Whilst the debit card functions are not affected, when the card is used to obtain credit under a continuing credit contract the new rules may apply.

Section 133BA(1) defines “credit card contract”:

• “(1) A credit card contract is a continuing credit contract under which credit is ordinarily obtained only by the use of a credit card.”

Section 133BA(2) defines “credit card”:

• “(2) A credit card is:
  (a) a card of a kind commonly known as a credit card; or
  (b) a card of a kind that persons carrying on business commonly issue to their customers, or prospective customers, for use in obtaining goods or services from those persons on credit; or
  (c) anything else that may be used as a card referred to in paragraph (a) or (b). ”

Section 133BA(5) says:

• (5) If a credit card can also be used in other ways (for example, as a debit card, or to access other accounts):
  (a) the article is a credit card (despite the fact that it can also be used in those other ways); but
  (b) the provisions of this Act that are expressed to apply in relation to credit cards do not apply to the article in so far as it can be used in those other ways.”

In other words it is a credit card if it can be used to obtain credit (and that is ordinarily the only way the overdraft or line of credit is accessed) but if it can be used for other things (such as to debit a savings account) those other uses are not affected.

Source: Langes website.

When do the new regulations come into force?

1 July 2012. Therefore ideally CCKFS systems need to be in place (online) and tested early June to avoid potential non-compliance.

What is likely outcome if my organisation doesn’t comply by 1 July 2012?

As per Division 3 of the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011, if an organisation does not provide a CCKFS or provides a CCKFS that is not up-to-date, civil and criminal charges could be faced. Failure to comply with sections 133BC and 133BD may attract a civil penalty of $220,000 per breach.

Source: http://www.comlaw.gov.au/Details/C2011A00084.

Should I look for a system that is legally certified?

Yes!

Many solutions on the market require the client to conduct their own legal reviews. Brighton Consulting’s InfoCast system has been independently reviewed by a specialist legal firm.

Is it possible to capture leads from an automated CCKFS system?

There are a number of CCKFS systems on the market. Most are designed to meet the immediate compliance requirements associated with the new legislation. InfoCast has been designed with lead generation in mind.

Once consumers have completed their loan simulation, they are presented typically with a large ‘call to action’ button which invites them to obtain their CCKFS. The call-to-action button is linked to an online form which encourages the consumer to obtain their CCKFS via email. The consumer is also offered the opportunity to send a copy of the CCKFS to a friend.

If the consumer is uncomfortable providing their email details, they can view the CCKFS on screen and then print/save the document anonymously.

Every time an InfoCast fact sheet is requested via email, an alert is sent to the nominated administration email address. On receipt of the email, designated staff simply log into the system to review the details. Staff will be presented with the following information:

• first and last name;
• email address;
• date the request was made;
• details of the friend (if ticked);
• copies of the requested factsheet;
• follow-up acknowledgement; and
• notes relating to follow-up.

Following review of the above information, staff may undertake further consumer contact (if appropriate) and record this contact within the system. The system shows which leads have already been followed-up plus a ‘notes’ feature which enables the outcome of the follow-up to be recorded in detail. Alternatively, InfoCast enables you to export all leads into excel. The data can then be transferred into other databases such as a CRM system.

Can our service staff access and modify the system according to the needs of individual consumers?

The in-house version of InfoCast enables interest rates and fees to be adjusted on the fly. It can be used by service staff during negotiations with customers to produce CCKFS for discounted products etc. The in-house version can be easily accessed from within a staff Intranet.

Is a branded system available?

InfoCast can operate stand-alone or it can be fully integrated within your website/Intranet via an iframe. The InfoCast simulator and content pages can be customised to reflect your brand and marketing messages through template and style sheet changes, image inclusions and content adjustments. In addition, InfoCast allows you to create tailored email templates to accompany the fact sheets. You can format your emails to include:

• your logo;
• company colours and fonts;
• customised wording; and
• even promotions or special offers

Email content can be updated through InfoCast whenever needed.

Learn more

Learn more about InfoCast by:

• Clicking on any of the tabs above
• Downloading an InfoCast factsheet
• Requesting detailed InfoCast product infomation and costs by using the form in the sidebar of this page