NSW Takes Decisive Steps Against Unlawful Merchant Fee Practices

1

During a review of the 2023-24 financial statements, the NSW Auditor-General highlighted the issue of unauthorized fee surcharges. The revelations were surprising, bringing the matter forcefully to the notice of the current administration.

For years, legal advice from the Crown Solicitor's Office, beginning in February 2016 through December 2022, consistently warned against the unlawful imposition of merchant fees by Service NSW. Despite such advice, over 92 million transactions incurred charges close to a whopping $144 million. The surcharges, conceptualized as cost recovery for transaction fees by payment providers, were initially sanctioned by NSW Treasury in 2012.

The spotlight is on mini transactions such as 30 cents for a driver's licence renewal, 29 cents for a marriage certificate, and a $1.92 fee to renew a small car registration. These seemingly small fees added up, creating a significant financial burden on the public.

With this information now public, the current government, led by the Minns Labor administration, has moved swiftly, creating a dedicated incident management taskforce to stem these unauthorized charges and to mitigate future occurrences.

Notably, customers affected by these charges are urged to register for updates regarding the government's corrective measures through Service NSW channels either online at the official website or via their service hotline.

The Ministers for Customer Service, Digital Government, and Finance, have sought an independent inquiry by requesting the NSW Ombudsman to investigate potential maladministration. The department's Secretary has also escalated the case to the Ombudsman and the Independent Commission Against Corruption, highlighting concerns over ignored legal advice.

A proactive approach by the new taskforce has successfully shut down over 80% of unlawful surcharges in Service NSW transactions and more than 90% of online payments. For now, all other remaining transaction fees, including those from in-person credit card terminals, are being rapidly phased out. To accommodate citizens, Service Centres are offering surcharge-free payment alternatives, such as cash payments.

Amid ongoing remedial undertakings, the NSW government has instructed all departments to audit their merchant fee practices by the end of November to ascertain legal oversight and compliance, echoing Minister for Finance Courtney Houssos’s comments: “Families, households, and businesses expect governments to act within the confines of the law.”

Minister Jihad Dib also emphasized the urgency, stating: “Our priority has been to halt these charges swiftly.” He underscored the ethical need for transparency regarding the past continuation of these fees despite the legal advisories.

Published:Monday, 4th Nov 2024
Source: Paige Estritori

Share this news item:

Finance News

AI in Financial Planning: Unlocking Potential with Prudence 21 Nov 2024: Paige Estritori Artificial Intelligence (AI) has rapidly become a focal point in modern financial planning, offering the potential to transform how advisers interact with clients. By providing automated solutions for routine tasks and analyzing vast data sets, AI promises increased efficiency and more personalized financial recommendations. - read more

Financial Advisory Expansion: Balancing Growth and Regulatory Challenges 20 Nov 2024: Paige Estritori The financial advisory sector in Australia is poised for significant expansion, with the potential to extend advisory services to an additional 650,000 clients. This promising development hinges on resolving existing regulatory barriers. A detailed analysis by Empower Business Advisory, sponsored by Colonial First State, underlines this potential shift in the industry landscape. - read more

Aussie Homeowners Show Resilience Amidst Rising Interest Rates 20 Nov 2024: Paige Estritori Amid the global economic shifts, Australian homeowners, notably exposed to fluctuating interest rates, have defied pessimistic predictions and demonstrated resilience. Unlike many countries, most Australian mortgages are subject to variable interest rates, which heightens sensitivity to cash rate changes. - read more

NAB Faces Legal Action for Delayed Hardship Responses 19 Nov 2024: Paige Estritori In a recent development within the financial sector, the National Australia Bank (NAB) finds itself embroiled in a legal dispute initiated by the Australian Securities and Investments Commission (ASIC). At the center of the controversy are allegations that the bank failed to timely respond to hundreds of loan hardship applications from its customers. - read more

Employment Holds Steady Amid Rate Speculation 15 Nov 2024: Paige Estritori Australia's unemployment rate remained fixed at 4.1% this October, marking the third consecutive month without change, according to newly released Australian Bureau of Statistics data. Despite this steady figure, the growth of new jobs appears to be waning. - read more

UK Broker Hit with Multi-Million Pound Penalty for Misallocated Premiums 15 Nov 2024: Paige Estritori A UK brokerage owner has been ordered to pay a substantial fine exceeding £1 million (approximately $1.96 million) and has been barred permanently from the financial services industry. This comes after regulators found him guilty of financially mismanaging funds intended for insurers and providing misleading information. - read more