SYDNEY Jan 30 Australian airlines Qantas
Airways Ltd and Virgin Australia Holdings Ltd
have been given the go-ahead for controversial plans to send
unsolicited and potentially illegal debit cards to their
millions of frequent flyer members, according to a report.
Corporate regulator the Australian Securities and Investment
Commission (ASIC) has given the airlines a "no-action" letter
regarding the cards, meaning they do not plan any regulatory
response, according to Compliance Complete, a Thomson Reuters
The cards, which are described by the airlines as "prepaid
cards" and by ASIC as stored-value cards, are new "chip and PIN"
enabled frequent flyer cards that the airlines are launching in
conjunction with their partners in the banking and payment card
Lawyers told Compliance Complete the card mail-outs were
likely to breach laws governing unsolicited offers of financial
products, but ASIC's no-action letter meant the matter was
unlikely to ever go before the courts.
ASIC said the kinds of cards being distributed did not exist
when the law was enacted and it had imposed a number of
conditions around opting into the stored-value facility of the
card and acknowledging the risks of the products.
"The risks (including financial risks) for the consumer in
being sent one of these cards are low and are certainly much
lower than the risks involved where a credit card or debit card
linked to a deposit account, such that the card can immediately
be used to access the consumer's funds, is sent to a consumer,"
ASIC said in a statement in response to the article.