A Big Win for Consumers on Credit Card Levy

15/06/2017 09:51

The Consumer Council of Fiji is pleased with the decision made by the Association of Banks inFiji (ABIF) and Fiji Revenue and Customs Authority (FRCA) to reimburse consumers who werewrongly 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 throughthe Complaints Management Forum for consumer justice. After five and half years of continuouslobbying, FRCA decided to provide the redress.

The levy which was introduced in 2012 allowed commercial banks to charge credit card holders a2% 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 accounton 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 theconsumers were expected to pay 2% credit card levy based on banks billing cycle and not thedue date stated on the statement. But the irony was consumers did not know the banks’ billingcycle. They ended up paying 2% levy despite clearing the outstanding amount before or on thedue 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 toalign the imposition of credit card levy to the due date on the credit card statement rather than thebanks’ billing cycle.

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

While it is a relief to note that consumers who were unfairly charged can get a refund byproviding evidences of any incorrect credit card levy charges, but they are being burdened tosearch for bank statements dating back to 2012. Why the burden of proof has shifted to consumerswho may not even know that they were wrongly charged? Banks should have this informationwith them.

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

The Council sincerely hopes that the commercial banks will refrain from charging its credit cardholders to obtain statements for 2012. The banks will have the consumer records in their systemand it will only be reasonable if they provide such information at no cost to consumers which canassist them in lodging their returns with the FRCA. The banks have to take responsibility in thisregard so that consumers’ don’t have to pay for no fault of theirs to get redress from FRCA.

Summaryď‚· Consumers to check their credit card statements from January 2012 to mid 2013