Credit Cards: CabCharge pays $15m in trade abuse case

CabCharge gets off lightly in credit card scam

If you elect to pay by non cash means in a cab in Australia, you goy stung 10%.
Well now the 10 per cent surcharge on taxi fares for non-cash payments could be lifted after CabCharge admitted breaching the Trade Practices Act by abusing its market dominance.

Credit cards business closed to competition by CabCharge unlawful

CabCharge admitted it had taken advantage of its position in the market to refuse requests from competitors to process Cabcharge cards on their electronic payments systems.
The company also admitted to predatory pricing by installing its fare meters free or below cost, squeezing rivals out further.

CabCharge agrees to pay $15 million in fines

It will pay penalties and costs of $15 million after agreeing to a settlement with the Australian Competition and Consumer Commission [ACCC] yesterday in the Federal Court, avoiding a lengthy court battle that was due to begin next month.
The ACCC chairman, Graeme Samuel, said the settlement was a ''clear message to Cabcharge it had gone too far'' and would lead to greater scope for competition in the industry - and lower prices for taxi customers.
''Generally where you can get some competition in the marketplace you tend to find service levels increase and prices reduce for consumers,'' Mr Samuel said.

''You could see potentially service providers saying to cab drivers and cab owners 'We can offer you a better deal than Cabcharge can offer', and Cabcharge will have to meet that competition.''

CabCharge slugs 10% on every credit card transaction

Cabcharge levies a 10 per cent surcharge on every fare processed on its systems paid by credit card, bank debit card or through its proprietary charge card and vouchers.
Its long-standing and popular charge account has helped it become the dominant player in the industry. It has its machines installed in 96 per cent of taxis across the country, though its rivals have increasingly encouraged operators and drivers to install their machines additionally, offering them a cut of the 10 per cent surcharge.

CabCharge forced to agree to Compliance of ACCC

The court ordered Cabcharge to comply with a compliance program involving beefing up its internal controls and training to ensure it did not contravene the act again. It will also be subject to external audits.
Mr Samuel said the penalty would deter CabCharge from repeating its behaviour.
''They now know what constitutes a breach of the act and misuse of market power.''
In a joint submission with the ACCC tendered to the court, Cabcharge said it had been unaware it was breaching the act but now accepted its actions were ''serious in nature and extent''.
The submission said the contravening conduct was undertaken at ''the most senior level of the corporation'', including its prominent executive chairman, Reg Kermode.
Mr Samuel said the settlement had reaped the highest penalty imposed by the commission for the misuse of market power.

Were CabCharge rewarded for bad behaviour?

Based on the amount ripped off from the public, many are saying that CabCharge out out of jail in that the fine was tiny compared to the money made from the scam and this was reflected in CabCharge's share price surging over 10% higher.

You will need to claim losses yourself

The ACCC did not quantify any loss or damage to consumers or competitors, saying it was ''not likely to be readily ascertainable''.
Whilst CabCharge denied its behaviour had contributed to any such loss or damage if you paid the amount you would have suffered.
Any individual, business or Government Department who has suffered a loss or damage, or who wants to get a refund on the 10% surcharge should contact CabCharge now.
Source: Mr Mortgage

Australia's Mortgage rates to stay on hold? IMF says it should!

IMF say to Reserve Bank of Australia leave interest rates till European debt situation is clear.

Mr Mortgage has been saying for months that interest rates should not rise till after the new year when the World Economy has played out [amongst many other reasons]. This last fewweeks everyone and his dog has been saying rates will rise in October. We have been asking why should rates rise at all this year?
Countless other so-called experts, as reported in all the media, have been saying a rise is on for October. Many Bank economists have switched to the October rate rise will happen theory.
With the financial markets now betting on a mortgage rise, and all  the big banks trying to talk up a rate rise because they will make a killing on the currency markets, the pressure is on the RBA. When rates do rise the Big banks can then slip in their own mortgage rate rises on top of the RBA's  and hope their customers don't notice. But there are too many families in Australia that will suffer mortgage stress if rates do Increase.
The major banks are using mortgage interest rates as milking cows for record profits.

This is the biggest beat up I have seen since the Iraq War WMD.

Why the RBA will leave official rates on hold.

1. European Debt crisis should hold off interest rates raises till into next year.
2. The RBA enjoy second guessing the financial markets who seek to profit on their decisions. They are Independent and like to remind the markets of this.

The IMF agrees with Mr Mortgage on the absence of reason to raise rates.

Well the IMF now agrees with Mr Mortgage, and says a bust may be closer than anyone expects, with a risk that the sovereign debt crisis in Europe may again throw world financial markets into turmoil. This is the second recession that many having been saying could happen. In other words, the US recovery is a "dead cat bounce".Where is the job growth, the housing market recovery, and the shoppers in the US picture? Was the US stimulus too small to work? And will the US Fed go negative with Interest rates? And if they do will the $AU dollar be overpriced?

IMF advises RBA to hold off on lifting Mortgage rates

The IMF advised the Reserve Bank of Australia to hold off lifting interest rates. "The Reserve Bank has scope to wait for the outlook to become clearer," the fund said. There is no impending disaster to happen if it leaves rates as is.
The RBA board is meeting next Tuesday and was widely  tipped to increase rates from the current 4.5 per cent to 4.75%.
But as many people know, the Reserve Bank of Australia's Governor and Board likes to foil currency gamblers who try to second guess Board decisions. The RBAwins when currency traders lose.
In any case a resulting higher dollar is bad for Australia in many ways, as it hurts exporters, farmers and tourism in Australia.
Expect to see the dollar crash in value in the coming days, as the bets on an interest rate rise are switched.
Author: Mr Mortgage

Lowest interest rates ever for NYS's Mortgage Agency

New York State's mortgage agency interest rates are the lowest in its 40-year history for 30 year fixed rate mortgages, thanks to US treasury bond initiative

Whilst the national average rate on a 30-year fixed rate mortgage stopped hitting record lows the first week in September, the NYS mortgage agency betters them.

30 year fixed rate mortgages from 4%pa for owner occupied homes
The State of New York Mortgage Agency offers lower then market rates for low to middle income mortgage applicants. now touts fixed rates of 4 percent, and for Long Island households with one or two people, the total income goes up to $122,160.

First home buyers offered 3.5% pa mortgage rates if they earn less than $71,260 pa

To encourage first home buyers into the housing market NYS Mortgage agency is offering first time home buyers a low mortgage rate of 3.5 percent per annum for first time home buyers who earn less than $71,260.

Freddie Mac rate average up at the same time

At the same time the US Federal Government mortgage loan entity Freddie Mac gave an average fixed rate percentage for a 30 year fixed mortgage rate of 4.35 percent per annum for the same week. That was slightly up from the previous week's 4.325% pa, which had been the lowest since Freddie Mac began tracking this rate in 1971.

Lower Mortgage rates make buying a home in New York more affordable

Home buying in the State of New York will be more affordable for low to middle income home buyers, with the NYS mortgage agency delinquency rate 5 times less than the national average.

US Federal bond issues allow States' housing agencies to lower their home mortgage loan rates

State housing finance agencies across the US sell bonds to the federal government, and before Labor Day the U.S. Treasury Department announced it would allow Freddie Mac and Fannie Mae to buy such bonds at lower interest rates. These savings allowed State of New York Mortgage Agency to lower its rates to borrowers.
To find out more about New York State Mortgage Agency, click here.
Source: Mr Mortgage