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ANZ has released a report card detailing progress and next steps on its Responsible Lending Code introduced in November 2005.
The report card shows that ANZ has reduced by 11% the pool of customers who would have otherwise received an offer to increase their credit card limit as a result of our responsible lending promises. This includes:
- a 5% reduction due to the exclusion of customers who have repeatedly missed repayments or made only the minimum payment for the six months; and
- a further 6% reduction due to the exclusion of customers on fixed incomes such as recipients of government pensions.
ANZ's Responsible Lending Code, a first for Australian banks, was developed following stakeholder feedback and research commissioned by ANZ into financial literacy and the causes of financial difficulty. A key finding of the research was that lenders can influence an individual's path to financial difficulty - particularly through the marketing of credit card limit increases.
Group Managing Director for ANZ's Personal Division, Brian Hartzer, said the reduction in credit limit increase offers is a significant step in addressing financial difficulty in Australia.
"Our approach reflects our view that both responsible consumer behaviour and responsible lending practices are required to reduce financial difficulty.
"We want to get better at spotting customers who are getting into financial difficulty at an early stage, so we can offer assistance before the problem becomes worse.
"We are also looking at ways we can design our products to make it easier for customers to manage their debt responsibly. One option is a credit card which allows customers to transfer a part of their outstanding balance to an installment plan so they can make set repayments over a specified period, " Mr Hartzer said.
The report card also outlines ANZ's plans to improve customers' access to clear and concise information about the cost of credit. For example, an online calculator would enable customers to find out how long it would take them to pay off their balance, or the monthly payments they would need to make to pay off a balance within a specific timeframe.
Read the complete ANZ Responsible Lending report card (PDF, 260kb).
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