CHOICE membership

Universal Gift Cards - Woefully Insufficient Consumer Protection

How / where do we report this company? I was thinking the ACCC but they do not deal with financial, not sure what prepaid cards fall under.

Looking at product reviews (which I have added to):

we can see a solid history of:

  • Not catching / preventing fraudulent transactions

  • Very poor customer service in resolving situations such as removing the fraudulent transactions

  • Practices that are questionable under Australia law - For example:
    I received a prepaid visa gift card purchased new by my company in 2021, I had to activate by Feb 2022 and consume it by August 2022 - yet gift cards are meant to be 3 years minimum expiry.

  • It seems clear at least one major hack (leaked list of gift card numbers, or a re-engineered algorithm) has happened recently yet no proactive steps have been taken to mitigate this impact on Australian consumers

I would love Choice to look into this company as a possible candidate for a Shonky, even better if we could get some pressure on them to pick up their services - Visa or Mastercard surely would not survive if they behaved the same.

Appreciate any advice on where to escalate if possible.

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Thanks for letting us know about this @Danae, I’ll pass on the info to our investigations team. The ACCC may still be interested to receive a report, or in the case of an individual dispute that can’t be rewsolved, you can also contact your state or territory’s consumer affairs/fair trading body.

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A few observations:

  • Not everyone has a bad experience with this company. I received a gift card a while ago and did manage to spend most of the value on goods and services.
  • A swathe of bad reviews aren’t really relevant because most people have no choice. In other words, someone else chose the provider and gave the card to you (or me) - and it is the user of the card who will have any problems that arise. In other words, the person with decision-making authority is not the person who will experience any problems. Hence your complaints really need to be fed back to the person who gave the card to you (your employer).
  • This gift card is 3 years minimum expiry for me. You might want to query that with your employer as to whether they had a choice about expiry period. There is a short deadline to activate. Presumably they want a deadline on activation so that if cards are lost or stolen, the cards don’t hang around “forever”.
  • I did contact their Customer Service about a minor issue and received a prompt response that was not obviously a bot. So there is presumably a human being there to address enquiries.

Two actual gripes I did have are:

  • Requires a mobile phone number to activate.
  • For non-reloadable cards, there is a good chance that you will not be able to spend the last few dollars. So a few dollars will end up being forfeited. Probably this is part of their business model.

General comment: Whenever there is a problem in a heavily regulated industry like finance or telecommunications, you should ask yourself the question: Is this problem actually being caused by the government?

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An allied question and just as relevant, would such industries be held accountable in any way for anything if not for government regulation? Some people are sure business can always be trusted, and others are equally sure business can almost never be trusted, and the reality is somewhere in between.

Most people recognise our governments are often amateurish even when self serving or helping one or another party and get it wrong. Yet when they get it wrong they double down rather than fix it as often as not.

It is not just the government then, it is the voters who install and maintain the government(s).

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My point was as much about regulations that exist solely for the government to pursue its interests, rather than regulations that exist to protect the interests of consumers (or indeed to protect the interests of businesses).

So the core of the comment is: If something bad is happening, ask whether it is happening because the business is forced to do that by the government.

It doesn’t actually matter whose interests are being protected or furthered (government, consumer, business). It does however affect whom you should complain to.

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Regulations are becoming more driven by complaints rather than regulated by the administering authority. If the administering authority fully regulated/monitored everything they regulate, government would become massive … or government would be hesitant in expanding regulation coverage due to costs and resources required.

In relation to Rules for Gift Cards, they are explained here:

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I did receive a replacement card after a lengthy wait and back and forth. However I am unable to use the funds (this time I lined up a bunch of candidate purchases online ready to go as soon as I activated the card).
Some vendors succeed once then fail on a second attempt, most do not succeed even with the card set to Australia and the vendors also billing from Australia (seen on the declined transaction history).
This seems very much like a scam, if only by providing poor service and waiting for customers to give up (and thus pocketing the cash). I wish there was a suitable body to investigate, it’s as good a straight out fraud - marketed services not provided.

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