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Legislative Assembly for the ACT: 1996 Week 3 Hansard (27 March) . . Page.. 696 ..

MS FOLLETT (continuing):

Another aspect that I regard as rather sinister is in the terms and conditions that accompanied the issue of these cards. In fact, Mr Speaker, there was amongst those terms and conditions the capacity for the banks to change the terms and conditions without reference to the consumer at all. Again I think this is something that people must be aware of. It may or may not be a significant issue, but certainly the banks have attempted to give themselves total control in this situation. Another aspect that I think is worth noting is the risk to your cash if you lose your card. As matters stand, I believe that, if somebody has a credit in their smart card and they lose their card, in effect, they have lost their cash. You cannot cancel it and get your money back. You cannot write and tell the bank to stop all further transactions. In effect, you have lost the cash. That is a significant aspect, particularly for people on low incomes.

I believe that people have a right to that kind of information in order to make an informed decision on whether or not to be part of the trial. In fact, Mr Speaker, I think it is a misnomer to call it a trial. What it is, of course, is a marketing exercise by the banks involved. They are attempting to persuade people to make use of this facility, and the reason they are attempting to persuade people to make use of the facility is so that they, the banks, can make money out of it. The fact of the matter is that all of the money in the individual electronic purses - what you have on the smart cards - is pooled. At the end of each day, that pool is reconciled, and, of course, there is a large balance. Every consumer will not spend the whole of their electronic cash every day. The banks make money on that pooled resource. Of course they do. If it were a matter, say, of each card having a credit of $100 or so at the end of the day, then we would be talking about some millions of dollars at call for the banks and for them to make money on.

It is also the case that there could be fees and charges on these smart cards. I understand that they have been waived for the first few months, as far as we know; but, of course, we are not aware of what the banks' final intentions are. In fact, Mr Speaker, I think that the current trial is quite clever, in a way. They are not actually calling it a smart card; they are calling it "MasterCard Cash, the smarter card" and using any number of devices, perhaps, to present this facility to consumers in the most attractive light possible. I say, "Let the buyer beware". Any consumers who go into this with their eyes shut could be running a risk with their own money and could, at the end of the day, be making a small donation to the banks' profits which perhaps they did not want to make. So, there is no such thing as a free lunch and there is no such thing as a smart card that does not cost you anything, in my opinion.

Mr Speaker, the small step which I have taken in order to at least protect the privacy of people taking part in this smart card trial is, I believe, just a timely warning that the introduction of the smart card technology is being watched and that there are legislatures, there are governments, there are elected representatives, who will act to protect the consumer in the introduction of this new legislation. Mr Speaker, I commend the steps that the Government has taken to raise this matter at the Consumer Affairs Ministers council. I understand that that matter is due to be debated in September of this year. I trust that the debate at that level will lead swiftly to a national and mandatory regime for ensuring that the consumer interest in this new banking facility is totally protected. That has been my intention in taking this first step - to protect the privacy of those consumers. I thank members for their support for the Bill and I trust that it will be but a first step in a national regulatory regime for smart card technology.

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