Woolworths have given an exclusive dealing notification to the ACCC relating to its proposal to give exclusive rights to its proposed "pay at the pump" facility at Caltex stations to its HSBC supported Woolworths Everyday Money Credit Card. Customers paying with other cards will need to pay inside at the register.

The rest of the financial industry objects but it is interesting to note this Computerworld story that from 1 January 2009 Visa requires US gas retailers to ensure that all new pumps capable of processing debit card purchases are equipped with an encrypting PIN pad, or EPP, that supports Triple DES.

Gas station owners have until July 1, 2010, to ensure that all of their existing pumps are upgraded to support Triple DES.

Perhaps all Australian petrol retailers will have Visa supporting pay at the pump facilities soon.

More…see Core Economics

UPDATE 30 January: The Australian Competition and Consumer Commission has issued a draft notice opposing Woolworths' and Australian Independent Retailers' proposal to restrict payment options at their new pay at pump facility.  Here

On the other hand, the Australian Competition and Consumer Commission has decided not to oppose Stadium Australia's proposal to offer contactless payment services at ANZ Stadium to holders of a Visa payWave contactless card, on the grounds that it is in the public interest: here

In the UK, the deposit guarantee is only £50,000 but the issue they have had to address is still relevant to Australia: what happens to existing customers with savings in two merging organisations who may find that their combined deposits in the successor institution exceeds the maximum deposit guarantee limit?

The UK Financial Services Authority has introduced a rule change which enables a building society which merges with another building society to keep its separate depositor protection compensation limit providing the merging society continues to operate the business of the merged society under its former name.

This is now another issue to address in considering the effect of a merger.

Our first compliance workshop for 2009 will take place in Sydney on 3 February.

If you're interested contact Levina at lchim@langes.com.au.

Here's the Agenda.

LCAS Meeting Agenda – 030209[1]

The new threshold is $333,630. The next change will be on 11 February 2009.

Further information is available at Hardship Threshold.

I discussed the ATM interchange fee reforms here.

The A New Tax System (Goods and Services Tax) Regulations 1999 are being amended to ensure that all supplies of automatic teller machine (ATM) services are consistently input taxed.

This change is intended to prevent GST anomalies from arising as a result of the shift to direct charging for ATM services that will take place on 3 March 2009.

Treasury has now issued draft regulations and an explanatory statement for public comment

Submissions close on 5 February.

“Unjust” and “unfair” are terms being used more frequently in consumer protection laws. (see Section 70 Consumer Credit Code)

They are based on equitable principles regarding the conduct of a party to a transaction which uses its superior bargaining position to obtain a favourable result.

The UK Financial Services Authority recently obtained an undertaking from National Australia Bank Europe Limited (trading as Yorkshire Bank) to change its mortgage terms to comply with Regulation 5 of the UK Consumer Contracts Regulations which provide that a contract term shall be regarded as unfair ‘if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer’.

In this case, the FSA took the view that some grounds for default in NAB mortgages were unfair, including default where a mortgagor had committed a minor breach in a facility with a NAB associated company.

NAB agreed to limit the scope for the Bank to exercise its powers to more serious defaults.

The FSA said:

“In drafting their consumer contracts, firms need to consider carefully whether reserving the ability to exercise a power is fair in each and every circumstance (as outlined in the contract). Specifically they should consider whether the ability to exercise those powers in each and every circumstance might create a significant imbalance in the contract, which is detrimental to consumers. “

UPDATE: Speech by Katherine Webster, Manager of the FSA Unfair Contract Terms Team

the (Consumer Contracts) Regulations are intended to operate in a free-market economy and do not constrain a firm from managing its business prudently. When we exercise our powers under the Regulations we do not wish to impede the legitimate commercial judgements that firms make having regard to the overall well-being of their business and all of their consumers

The Regulations are not intended to prevent firms operating in a fair, sensible and commercial way; nor are they designed to impose an unreasonable burden on firms. Rather, their purpose is to achieve a balance between the rights and obligations of both parties to the contract and to ensure that consumers do not suffer detriment.