Australia’s corporate regulator has forced two of the country’s banks to overhaul campaigns designed to get customers to increase their credit card limits.
The Australian Securities and Investments Commission on April 24 said it had evidence showing that Westpac Bank Ltd. might have misled customers through email, account-statement and online messaging.
In the campaign, Westpac asked cardholders to “opt in” for future invitations to increase the credit limits on their accounts, and 3,700 cardholders provided their consent, the regulator said.
The campaign, which ran during February and March, was “misleading” because it created a false impression customers needed to act urgently or they could miss out on gaining access to extra funds, the commission said.
In a statement responding to the commission’s allegations, Westpac promised not to rely on the consents it received and said it would contact the cardholders again for their consent in accordance with the regulator’s directive.
Under Australian banking laws, credit card issuers cannot send unsolicited invitations to increase customers’ credit limits.
The regulator’s move comes a month after it forced Commonwealth Bank to scrap the consents it had obtained from 96,000 customers in an email campaign. The commission said then the bank's email messages were misleading because they suggested customers who failed to complete an electronic consent form would “lose the chance” to receive future credit offers.
Commonwealth Bank similarly agreed to contact each of the customers to re-solicit their consent properly.
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