Citigroup has refunded close to $5 million to around 230,000 customers after failing to properly disclose that credit card international transaction fees applied when a merchant processed an Australian dollar transaction overseas, ASIC has said.
The regulator noted that in early 2016, the bank started charging international transaction fees “for Australian dollar transactions made with merchants located overseas or where the merchant uses a foreign bank or entity to process transactions”.
This change affected a number of both Citibank-branded and white-label credit cards, and while Citibank modified its disclosure around the fees, it “failed to properly disclose” that Australian dollar transactions processed abroad would incur those fees.
“This may have led customers to believe that international transaction fees would be charged only when a transaction was made in a foreign currency or with an overseas merchant,” ASIC said.
“For Citibank-issued credit cards, Australian dollar transactions with an Australian website where the merchant uses a foreign bank or entity to process transactions – attract international transaction fees.”
Citibank has refunded affected customers their fees with interest and updated its disclosure to clarify where international transaction fees will apply, and will refund a further $48,000 to Virgin Money credit card holders who were charged “an incorrect percentage amount of the international transaction fee” of an additional 0.1 per cent.
“Financial product issuers must take care to provide clear disclosure to help consumers understand all circumstances where fees will be charged,” said ASIC deputy chair Peter Kell.
Read more:
AMP restructures financial advice network
Young Aussies in the dark about super
Suncorp changes prompt Nikko AM restructure
APRA will soon be handing down new prudential standards around remuneration following the damning results of an inquiry into 36 of Australia...
EXCLUSIVE Now that he’s secured his leadership, Prime Minister Scott Morrison has a major opportunity to secure the future viability of t...
A report from prudential regulator has found that CBA is not the only institution that suffers from an ill-defined culture and hazy account...
Get notifications in real-time for staying up to date with content that matters to you.
