Woolworths' banking claims run afoul of APRA

by Adam Smith25 Jul 2014
As supermarkets edge closer and closer to the mortgage market, one has been taken to task by APRA already.

Woolworths has run afoul of the prudential regulator over its use of the word "banking" in marketing its financial services, Fairfax has reported. Fairfax has claimed APRA is probing the supermarket after it labelled its credit card business a banking service.

A Woolworths spokesperson acknowledged that the company was using the wrong word, and said it would be rectified, Fairfax said. But consumer group CHOICE told Fairfax that Woolworths' actions were "careless".

"We have seen supermarkets moving aggressively into financial products and they need to be careful as they do that. It’s a highly regulated environment with a lot of consumer protections that exist for very good reasons. The risks associated with a financial product, particularly a credit product, are very different to those associated with buying food and groceries at a supermarket," CHOICE director of campaigns and communications Matthew Levey told Fairfax.

Both Woolworths and Coles have been making more aggressive moves into financial services, with Coles recently announcing a joint venture with GE Capital to offer financial products.

COMMENTS

  • by RaceToTheBottom 25/07/2014 10:57:49 AM

    Only some parts of the Financial Services industry are actively regulated. Online Banks and Online only brokers only pay lip service to any serious AML process, Identification of customers and certification of payslips & bank statements. They do not meet the customer, do not visit client homes or see original documents. Faked certification by someone claiming to be a pharmacist or the like is accepted. The cost savings of these cheap online only providers is being used to offer lower rates or refund commission, and to drive the honest and hard working broker out of business. Now with the supermarkets getting in to do to broking what they have done with fuel retailers will be interesting. Where they are going to get good financial advisers from will be interesting. Then again, they don't seem to care for quality, if their produce is any guide. The ACCC seems to regularly have issues with the major supermarkets ethics and misleading advertising.

  • by Andrew Edwards 28/07/2014 8:33:24 AM

    Your Coles and Woolies checkout will look and feel similar to a bank teller. "That's a great discount on your margarine Mrs Smith would you like to see someone about your home loan?"

    Interesting times ahead.