ACCC cites biggest bank

AUSTRALIA’S biggest bank has been singled out by the Australian Competition and Consumer Commision to face Federal Court on price fixing charges.

The ACCC is alleging the National Australia Bank colluded with other financial institutions to fix the price of fees levied on a credit card interchange scheme they were running.

The NAB faces stiff fines if the case against it is proven.

The ACCC began its investigation of the credit card scheme fee issue in response to a complaint in 1997.

It sought information and submissions from banks in 1998 before using its compulsory powers under the Trade Practices Act last year to seek more detailed information from them.

The banks’ credit card scheme is alleged to have created costs to merchants that were passed on to consumers.

The ACCC is alleging restrictions on membership to the scheme prevented others from entering it, thus creating greater efficiencies through competition.

It is estimated the banks charge interchange fees of about $600 million per annum.

The ACCC wants:

• A declaration that the NAB breached relevant provisions of the Trade Practices Act;

• Pecuniary penalties;

• An injunction stopping the NAB from engaging in similar conduct in the future;

• An order requiring the NAB to make fair and just restitution for the benefits derived from the alleged breach; and

• Findings of fact.

NAB managing director Frank Cicutto said the ACCC’s move seemed a tactical one to force changes before a reasonable review of the situation had taken place.