Westpac has recently reimbursed nearly AUD20m ($15.25m) to approximately 820,000 customers for failing to clearly mention the types of credit card transactions that attract foreign transaction fees for Australian dollar transactions.
After a customer complaint, Westpac informed the Australian Securities & Investments Commission (ASIC) that customers may have been incorrectly charged foreign transaction fees for Australian dollar transactions processed by overseas merchants.
Since, the bank’s terms and conditions did not clearly state that foreign transaction fees would be charged for such Australian dollar transactions, Westpac launched a process to identify impacted customers and provide refunds with interest.
Now, the Australian bank has updated its disclosure to explain that Australian dollar transactions will also attract a foreign transaction fee when they are processed by international merchants.
ASIC deputy chairman Peter Kell said: “It is essential for consumers to know when fees will be charged, so that they can make an informed decision when using financial products and services.”
“It may not always be clear to the consumer that the merchant or entity is located outside Australia, particularly in an online environment where the website uses an Australian domain name.
“We urge consumers to check whether the transaction they make is with an overseas-based merchant or processed outside Australia, especially when they shop online.
“Equally, credit card issuers need to ensure that the disclosure of such fees is clear so customers understand the fees that they are charged when using their cards.”