BankWest charging a cash advance fee by changing classification applied to merchant code

Money
1

This is more a community service announcement than anything.

So I use BankWest for all of my baking and have done so for quite a number of years and overall been quite happy with their ethics and service considering they are a back and all.

So I use the Oz.Lotterywest app to play lotto. I’ve for a number of years had my BankWest Mastercard as the link card to pay for the purchased lotto tickets.

I was going through my statement the other day which isn’t something I usually do, I just had a different issues that required a lot of back tracing payment. Anyway in do so I noticed a cash advance fee charged. I thought it was for a cash advance I took out, but had replaced before end of day so my end of day balance on my card was $0. Cash advance fees are only charged on withdrawal that have the card owing money. So my first thought was they pinged me for a couple of hours, which I was gonna to dispute anyway as it unethical. I looked into the details of the cash advance fee and seen the allocation as gambling not cash withdrawal. This was odd as I don’t gamble and although lotto is technically gambling the applying the reasonable person test and societal classifications it doesn’t fall into the gambling category. So I didn’t think it was for my OzLotteries purchase, also a multi year precedent of never being charged one before for OzLotteries purchase.

I contacted the bank and their first response was OzLotteries. I countered with the precedent set so it’s unacceptable. They then changed tactic and told me it was because of my cash withdrawal. I explained at end of day my balance was $0 so financially speaking I didn’t withdraw any funds into credit so again unethical and unacceptable. It then escalated and I was told it was the OzLotteries and the reason it has happened now and never before would be due to the merchant changing their merchant code which affects how the transaction gets classified. They agreed to refund the cash advance fee.

This is still not good big picture but I took the win. What they did next they shouldn’t have done as it lead to the discovery I made that has lead to this. The exact same time they refunded my cash advance fee they charge another one for the purchase I’d made with OzLotteries the day after the disputed purchase.

I had had enough of their bs so decided to load every barrel before I contacted them again. I then contacted OzLotteries themselves to asked them about their merchant code, when they last changed it, and any changes they made that would reclassify the handling of their transactions. Turns out they have had the same merchant code with BankWest (I’m not sure if they have different codes for different banks) from day one.

So what BankWest has done is change internally how they classify transactions made to OzLotteries. Changes that incur costs. Not only did they not inform their customers, they also blatantly lied about who and what was responsible.

So anyway with BankWest if your attached card is a credit card and you haven’t noticed yet, change the card to a debit card and fight for you money bank. Don’t forget to get the increased interest fee that are attached to cash withdrawal/gambling transactions also refunded. They tried to not do that also for me.

So although not illegal what they are doing is unethical and predatory in nature. So a bank being a bank while telling you it doesn’t operate like a bank.

2

With cash advances, there are two fees. One is a cash advance fee and the other is interest charged on the cash advance. The BankWest website explains it here:

Lottos are gambling and are recognised as such by State Government licensing agencies. Here are two examples:

Even Oz.Lotterywest acknowledges it is gambling:

I haven’t checked WA laws, but they could be similar to other states/Commonwealth where gambling companies that sell lotteries can’t allow payment using credit, it can be only paid using cash or debit transactions.

If this is the case, suspect Oz.Lotterywest gets around this by making the transaction as cash (advance) rather than credit transaction. If they process it as a cash advance, the transaction will be subject to the fees outlined in the above link.

As you have found, to avoid being hit with cash advance fees for gambling, use a debit card or other payment methods where transaction fees aren’t incurred.

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3

You’ve missed the point. The point being BankWest changed the way in which they classify the merchant code from OzLotteries without notification to a classification that incurs a fee. Then lied about it when confronted blaming the merchant, after initially blaming me. Tactics that are enough for most people to stop pursuing recourse from unethical behaviour.

As for he cash advance fee and cash advance interest, I’m fully aware of that, I was simply making note than anyone in the same situation to makes sure they are refunded not just the cash advance fee but also the cash advance interest. Because again charging an inflated interest triggered by a transaction that has been deemed an error and been refunded is an attempt at theft from the consumer through their lack of knowledge on the way interest is charged on cash withdrawals and also the tactics employed by larger corporations for maximising profits.

The OzLottories documentation never specified banks specifically or how to check the way their merchant code is allocated for your banking institution.

The lotto stuff. Like I said technically. But apply the reasonable person test and lotto is never put in the same category as casinos betting and horse races etc.

These things you’ve mention are fluff at best and a simple yet effective method used to put blame on the consumer so the dispute doesn’t get escalated.

The cavalier of the last part of your comment is a little disturbing. You shouldn’t have to wait to receive an unexpected charge to trigger an action to avoid that charge. Especially one that’s never been charged before. All charges need to be communicated especially once’s that are ambiguous, open to interpretation or new. I understand long standing charges that are industry standard and common knowledge being tucked away in a PDS. But anything a little off centre needs to be directly communicated. Serious changing a merchant code classification without telling customers that incurs a fee is not a defendable business practice.

I don’t mean to be mean when I say this, it’s going to come across like it though as I don’t know how else to word it, but your response sounds like it come from the same bank customer support workers (any big business service workers really) I was dealing with, in that it’s just scripted replies the shift blame to the consumer or some other third party and don’t actually pay attention to the issue raised. Like I completely understand the need for balance in a forum like this but the similarities are such it makes me wonder if you’re a funded devils advocate.

4

As indicated above, credit may no longer will be able to be used for online gambling. The state and Commonwealth governments are changing the rules. I haven’t checked if this change has been implemented or what WA lottery laws state, but information on the ABA association website suggests it should be around now for the Commonwealth laws if they have been extended to lotteries.

I believe that OzLotteries should be the one to notify you that fees may be incurred with a financial institution by making a transfer or cash advance to their online accounts. And one should check with their own financial institution to see if fees apply. The WA government lottery website indicates such (see below).

Irrespective of who may have changed the code or if a mistake occurred in the past, times are potentially changing in relation to being able to use credit for online gambling payments/transfers - something which your post has highlighted.

BTW, when we lived in Queensland, you couldn’t buy lottery tickets in news agencies using credit. One had to use debit or cash type transaction.

The Western Australia government lottery website states:

Is a credit card deposit treated by my financial institution as a ‘purchase’ or as a ‘cash advance’?

This depends on the financial institution. Some financial institutions may treat a transfer by credit card as a cash advance. Interest and fees would then be charged from the time of transfer. In addition, some credit card issuers may not allow funds transfers to a lottery website. Check with your financial institution for more information.

If BankWest consider transferring funds to a OzLotteries account a cash advance, which appears to be the case, then fees and interest will apply. You may have been lucky in past if cash advances weren’t picked up by BankWest as cash advances… and you avoided paying fees.

As indicated above, if you wish to avoid paying fees, there are alternative methods which can be used and as outlined on the OzLotteries website.

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5

I think you are doing the readers here a disservice if you are suggesting that they can necessarily get fees charged refunded for treating gambling withdrawals as a cash advance. Likewise saying that such transactions are an error and is an attempt at theft is not going to help anybody.

In the case of your bank their card terms and conditions as of 20 June are:

Cash Advance means any transaction treated by us as a cash
advance, including transactions where the Cardholder:
– draws cash from the Card Account using an ATM,
or at a financial institution; or
– makes any transactions we consider to be equivalent to cash
(including but not limited to traveller’s cheques, foreign
currency or money transfers, transactions for gambling
(including online gambling), lottery tickets or gaming
purposes generally); or … more items edited for brevity.

If other banks are or have adopted similar policies in response to governments’ requirements then clients will have to accept it. You may have got a refund because your bank messed up the way they did it and wasted your time but I wouldn’t assume that will be a general practice.

This kind of response is expressed here from time to time. It generally directed at one of the high volume posters when they say something that is unpopular and appears to some to be in biased in favour of big business and not the little guy. It is usually just reflecting reality. I have yet to see any such an accusation of bias that is warranted.

The top ten or so posters are responsible for 90% or more of the substantive replies here, mostly they have spent years doing good work here unpaid. They are not infallible but their views are more likely to be right than most and they tend to apologies quickly when they are in error. To suggest they are corrupt without evidence is rude to say the least and implies that Choice are incompetent about such matters as they have left those top posters and moderators in positions of influence for years.

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6

I may be looking at the OP with tunnel vision but my reading is ‘the problem’ was the lack of communication in a change in how the transactions to Ozlotto were categorised leading to unexpected charges that also accumulated interest, not that the change happened.

For the change to have happened either Bankwest or OzLotteries would have changed something. Be it a correction or response to changed regulations. Ozlotto and TheLott both have similar ‘warnings’ posted. Ozlotto’s is a year old, TheLott’s is not dated, but it suggests it was not recent.

Even if BankWest decided it was ‘doing it wrong’ and is going to ‘do it right’ it is reasonable to me a customer should expect, and it would have been better business if not expected, to advise their customers that had potentially affected transactions.

Reading one’s statement on a regular basis usually works a treat to pick up on important things :wink:

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8

You’re not paying attention to what I am writing. I’m not disputing if “gambling” should be classified as cash advance or not. That’s a different issue entirely to the point I’ve raised.

I’d say the onus is on both Marchant and bank to convey this information. OzLotto did but in a very ambiguous way. But based on OzLottos public notice, the actual decision on implementation was entirely at the Banks discretion so the if its got to be one, then the bank is the one that should be communicating its new charges to its customers. Putting a greater onus on a third party that has zero control over the issue is I find it really odd that your view is clear that someone not charging the fee should be responsible for informing there is possibly a fee, while then when it comes to the actual institution that’s charging the fee, they have zero obligation and its the consumers duty to look into any possible changes in fee structures or charges. That blows my mind.

Yeah changes my post highlighted, not something the banks have highlighted. Which they should be doing, not me. Expecting customers to trawl through fine prints at their own volition without provocation just in case a change in fees has happened is ridiculous,

Luck has nothing to do with it. There is no conceivable way that for over a year I. never got charged a cash advance fee due to an error. And if in the unlikely event the bank made an error that cost them money, that would be what I would have been told when I raised the issue. Does BankWest consider OzLotteries purchase as cash advance, they do NOW. They didn’t before. How can you in good conscious considering your position on this forum and still place the onus of blame on the consumer for not being aware a new fee that’s never been charged before and any information relating the the charge requires looking for it and is open ended when you do find it.

Im getting a better picture of what this forums purpose is though so I appreciate that.

9

Bang on the money sir. Thank god someone finally reads what is written for what it is and not with the sole intent to finding user error.

Also to add was the lies told in such fashion that most people wouldn’t continue to pursue. That’s extremely unethical business practices at play.

10

We can only read what you type and we have to assume that it all has some meaning to you and that you put it there for a reason. We try to address all of what you say.

You did raise the issue of whether lotteries are gambling or not. You did say that your purpose was to ensure others get a refund. You did make a number of accusations. Now you are complaining that people paid attention to these and not your real reason for the post. I find this confusing.

What do you think that is?

11

I think you’re the one doing the readers here a disservice for misrepresenting what I have written through in your dissection.

Like ole mate above you’ve completely missed the point behind my post. It’s clear in what you focused your reply and how you isolated the points of mine to counter, removing context that you’re reading with the intention of find fault not understand the issue. Again a disservice to fellow readers.

Again you’ve missed the point on the last part. Because if you paid attention at all, you’d understand the reason for that comment and the parallels it was drawing from. It had nothing to do with what was said being popular or not, it was about not paying attention to what’s being said and then offering a scripted response that has nothing to do with the issue at hand, sounds like it does though that’s designed to put up enough of a barrier that the consumer gives up on the dispute, while also removing any blame from the corporation.

12

your not reading what I’ve typed though in its entirety. you’re selecting one piece, removing all context in the process to counter on.

I’ll spell it out as simply as possible… The issue is the bank making internal changes to allocation of a merchant code, without informing customer, that incurs penalties to the customer. Then lying about what happened.

Read what PhilT wrote. He got it clear as day.

13

This topic has become broader than the original post. My main takeaway is expressed in my post above.

As there is nothing to be added that will be helpful beyond

I am therefore closing the topic, the OP’s point being made about communication that seems to have failed, regardless of which party owns it.

15

From what has been presented above, both from the OzLotto and BankWest website, the justification for the charge isn’t possibly new.

What appears to happen is BankWest had been processing OzLotto transactions as a transaction other than a cash advance. They identified this issue and rectified it so that it met their own terms and conditions (as @syncretic kindly posted above).

This correction of an error on their part now results in fees and interest being charged. Up until the month you identified the fees and interest, the error was in your favour as their systems didn’t apply these fees and interest to past cash advance transactions. You possibly have been lucky as you have saved $4+ per transaction + interest due to the bank error. This could amount to $100s each year if a weekly lotto is purchased.

Should they notify that they were in err and fees and interest are now to he charged in accordance with their T&Cs. They might chose to and equally chose not to.

If they retrospectively applied fees and interest to all past transactions which where in err, then a reasonable person would expect notification as there could be a substantial cost impost on the card holder.

It will be interesting to see if they continue to charge fees and interest in future months, as they can in accordance with their T&Cs and the card T&Cs you have accepted. It will also he interesting if they continue to provide a waiver to fees and charges every time you make a complaint.

I also suggest you read the information posted above about cash advances on credit cards, as fees and interest is charged irrespective of a credit card balance. They work differently to debit card cash withdrawals. Understanding this might assist you in the future when deaking with BankWest.

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