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A Big Win for Consumers On Credit Card Levy

A Big Win for Consumers  On Credit Card Levy
June 16
10:00 2017

The Consumer Council of Fiji is pleased with the decision made by the Association of Banks in Fiji (ABIF) and Fiji Revenue and Customs Authority (FRCA) to reimburse consumers who were wrongly charged 2% credit card levy in 2012 and 2013.

The Council on behalf of the consumers had raised this issue with FRCA, RBF and also through the Complaints Management Forum for consumer justice. After five and half years of continuous lobbying, FRCA decided to provide the redress.

The levy which was introduced in 2012 allowed commercial banks to charge credit card holders a 2% levy on their monthly outstanding balance. The levy was then remitted to FRCA by the banks.

The application of the levy was not fair on consumers as card holders who paid up their account on the due date (according to the credit card billing statement), were still being levied the 2% charge because the levy was applied based on each bank’s billing cycle.

This meant the consumers were expected to pay 2% credit card levy based on banks billing cycle and not the due date stated on the statement.

But the irony was consumers did not know the banks’ billing cycle.

They ended up paying 2% levy despite clearing the outstanding amount before or on the due date as stated on the credit card statement.

In light of this anomaly the Government amended the Income Tax Act (CAP 201) in May 2013 to align the imposition of credit card levy to the due date on the credit card statement rather than the banks’ billing cycle.

Not all consumers were affected and not all banks calculated credit card levy unfairly. Consumers who had credit card with three big banks (ANZ Bank, BSP Bank and Westpac) need to check their statement from January 2012 to August 2013 to establish whether they were charged credit card levy incorrectly.

While it is a relief to note that consumers who were unfairly charged can get a refund by providing evidences of any incorrect credit card levy charges, but they are being burdened to search for bank statements dating back to 2012.

Why the burden of proof has shifted to consumers who may not even know that they were wrongly charged? Banks should have this information with them.

It is clear that many consumers would not have the hard copies of their credit card bank statements for 2012 and in order to obtain the evidence(s) they will resort to their respective banks to get print statements.

The Council sincerely hopes that the commercial banks will refrain from charging its credit card holders to obtain statements for 2012. The banks will have the consumer records in their system

and it will only be reasonable if they provide such information at no cost to consumers which can assist them in lodging their returns with the FRCA.

The banks have to take responsibility in this regard so that consumers’ don’t have to pay for no fault of theirs to get redress from FRCA.

 

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