Dita has noticed the balance on her Velocity account dwindling and wants to know why it is happening.
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Q. Dita
I recently checked the balance on myVelocity Global Wallet, which is linked to Virgin’s frequent flyer program, and I noticed that the amount of money I had in the account was significantly less than the last time I checked. When I called up to complain, they told me there had been a change to fees. Are they able to do this? I had no idea I was being charged so much.
A. This change to the card happened in February this year and the card is now just called a Global Wallet as it is no longer associated with Virgin’s Velocity Frequent Flyer program.
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Consumer group CHOICE has issued a warning to people who hold a Global Wallet that there has been a significant change to the travel money card’s terms and conditions, which can result in members losing a lot of money.
From April this year, any Global Wallet account with no transactions for 30 days will be charged 1.5 per cent of the available balance every week in fees.
Prior to this change, the inactivity fees for the Velocity Global Wallet card were 0.5 per cent of the account balance, which was charged monthly if you didn’t use the card for a year.
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“CHOICE crunched the numbers and found someone with a $1000 balance on a Global Wallet product would have been charged $30 for no activity over six months before April 2021, after April the charge would be $325,” CHOICE investigator Andy Kollmorgen explained.
“In short, cardholders can be charged more than 10 times more in inactivity fees.”
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“This has come as a huge shock to the Velocity Global Wallet customers that CHOICE has heard from. Customers have had big withdrawals from their accounts that they didn’t see coming,” explained Mr Kollmorgen.
“The customers that have contacted us say that amounts totalling as much as $500 were taken from their account without their knowledge or consent.
“Card issuer Cuscal says it gave fair warning, but all they did was send through a confusing series of supplemental product disclosure statements. Recipients would have had to read down to the bottom of the final communication in March to discover that the inactivity fees would take a huge leap in April.”
Under financial services laws, companies have to give customers notice of increases in fees or charges 30 days before they take effect.
Card issuer Cuscal claims to have done this, but the notice must also clearly explain the nature and effect of the change to the account holder.
“CHOICE is really concerned that customers are telling us these fees have jumped so significantly, without any kind of clear advance notice of the change,” Mr Kollmorgen said.
The consumer group has notified the Australian Securities and Investments Commission (ASIC) about the fee changes in the hopes of recovering some of the money on behalf of consumers.
“We want to see Cuscal review its practices and make sure that it has given all customers fair notice of any fee changes,” Mr Kollmorgen said.
“If Cuscal hasn’t thoroughly given this notice to Global Wallet customers, they should refund their fees in full.”
CHOICE says that you should call Velocity Global Wallet on 13 18 75 and request that your inactivity fee charges be reimbursed. If they refuse to refund your money, you should then file an official complaint with Cuscal and then with the Australian Financial Complaints Authority.
In your complaint you should make note that you were not properly notified about the change in activity fees.
Do you have a Velocity Global Wallet? Have you checked your account balance lately? Why not share your thoughts in the comments section below?
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