Around 37.5 % of the total complaints regarding banking products in Australia for 2005-06 were about credit cards according to Banking & Financial Services Ombudsman.
As per the latest figures, disputes over credit card are most common form of consumer complaints made to BFSO (Banking & Financial Services Ombudsman) around 37.5 % of the total complaints regarding banking products in Australia for 2005-06 were about credit cards.
Complains have risen due to increase in competition among financial organizations. Total cases rose by 3.6 % in 2005-06 to reach 6,326 complaints, said Colin Neave of BFSO.
Many people are now using credit cards for daily transactions & living expenses, said Mr. Neave. Competition is heating up and firms have simplified the process of providing credit cards. Thus, people who can't even afford to make credit card repayments are increasingly using their credit accounts rather than savings or other accounts, which has attributed to the rise in credit card disputes.
Major concern is rise in consumer finance (due to the increase of customer's lending habits) complaints, particularly in credit cards. This shows that consumers are having problems in meeting current financial commitments, credit card payments, in particular.
Considerable changes were seen over the past decade in type & complexity of the products provided by Australian financial institutions. Increase in use & acceptance of telephone & Internet banking has fueled more disputes.
"In order to boost their market share, organizations have simplified the process of availing credit card facilities to an extent that non-deserving customers are able to avail a credit card or loan service which they can't afford," said an analyst at RNCOS.
As the interest rates rise & the mark becomes highly competitive, organizations planning to offer products should think more carefully. Not only regarding the product marketing & development but also the repayment ability of the customer to whom the organization offers the service.
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