As part of the 2017-18 Budget the Government announced that it would implement the phase 1 reforms outlined in the consultation paper released in May 2016. These reforms provide greater legislative protection to vulnerable consumers and exert more competitive pressure on credit card issuers.
Consistent with the Budget announcement, the draft Bill would:
- require that affordability assessments be based on a consumer’s ability to repay the credit limit within a reasonable period;
- prohibit unsolicited offers of credit limit increases;
- simplify how interest is calculated, including prohibiting credit card providers from backdating interest charges; and
- require credit card providers to have online options to cancel a credit card or to reduce credit limits.
The consultation on the draft Bill will close on Wednesday, 23 August 2017.