David Jones ‘pesters’ shoppers with tactic

 

Iconic department store David Jones is pushing high-interest credit cards onto shoppers with the promise of on-the-spot discounts, a selling tactic condemned by the banking royal commission.

The store's retail workers are selling David Jones American Express credit cards to customers at the point of sale, offering discounts of up to 20 per cent for approved applications.

The cards incur a higher-than-average interest rate of 20.74 per cent and carry fees ranging from $99 to $295.

Reviews on financial comparison website Mozo show customers were offered credit cards based on either a one-off discount on their immediate purchase, or a gift card.

A number of commenters said the process was not properly explained and felt "pestered" into signing up.

"So a David Jones salesman pestered me into enrolling into this card and rewards program," a Mozo commenter said.

"There was a $15 subscription to keep it alive. Fifth and sixth month I missed this payment … instead of informing me, they sent a letter giving me six days to pay and a credit agency would be holding this information."

Another customer said there was a lack of explanation when asked if they would like to join the card.

"Approached by a sales person advised that there was a special $100 gift voucher if we signed up today," they said. "Asked what was the catch and advised no catch. Full terms were not explained and we did not get our $100 gift voucher."

 

 

The store’s retail workers are selling David Jones American Express credit cards to customers at the point of sale. Picture: NCA NewsWire/Damian Shaw
The store’s retail workers are selling David Jones American Express credit cards to customers at the point of sale. Picture: NCA NewsWire/Damian Shaw

David Jones confirmed it used "tactical" discounts to promote credit cards, including one-off gift cards on approval.

"From time to time we offer tactical discounts to existing David Jones American Express cardholders, and are pleased to extend these same discounts to new card applicants," a spokeswoman said.

The banking royal commission recommended point-of-sale credit via retailers be abolished because it could not be assumed employees were truthfully recording customers' financial positions.

"Often, the retail dealer will not make the underlying sale unless the loan is approved," the final report said.

"The dealer thus has a strong reason to portray the loan applicant's financial situation in a way that will warrant loan approval."

Retailers are exempt from the laws and regulatory oversight that apply to banks and other financial institutions offering credit cards.

It is understood David Jones issues its cards through American Express's credit licence, with all legal lending responsibility falling on the issuer rather than the retailer.

Consumer Action Law Centre policy director Katherine Temple said retail staff signed people up to credit cards with limited oversight or accountability.

"This means retail staff are often not properly trained on the products they are selling, or what's required to comply with our credit laws," she said.

"The lack of licensing and registration means it's almost impossible for the regulator or lender to police compliance, as they don't even know who is selling the products."

 

 

Consumer Action Law Centre policy director Katherine Temple says retail staff sign up people to credit cards with limited oversight or accountability. Picture: Asanka Ratnayake/ Getty Images
Consumer Action Law Centre policy director Katherine Temple says retail staff sign up people to credit cards with limited oversight or accountability. Picture: Asanka Ratnayake/ Getty Images

Ms Temple said the federal government's proposal to axe responsible lending laws would make it easier for unqualified retail workers to foist credit card sales onto consumers.

Despite the royal commission recommending retail dealers should not be exempt from national credit laws, no action has been taken to outlaw the practice since the final report was handed down in February 2019.

David Jones said it provided internal compliance training for staff in line with American Express lending standards.

According to the Australian Financial Complaints Authority, 1475 complaints were made against American Express during the 2020 financial year, with the majority relating to credit cards.

Australian consumers have recouped about $895,000 from the card provider in the 12 months to June 30.

"AFCA does receive complaints from consumers about financial firms who have offered credit cards through retailers," the complaints watchdog said.

"We see credit card complaints where people have not understood what they're signing up to, what the fees and charges are, or where they've been given more credit than the cost of the goods purchased."

American Express is understood to be the card issuer and undertakes the credit check based on information collected in store.

Originally published as David Jones 'pesters' shoppers with tactic



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