ACCC ends investigation of proposed retrospective point value changes to the NAB Rewards Program

11 June 2002

The Australian Competition and Consumer Commission has concluded its investigation of alleged retrospective point devaluation changes to the National Australia Bank's Gold Rewards Program, Acting ACCC Chairman, Mr Sitesh Bhojani, said today.

"Last month, the ACCC wrote to the NAB about changes it announced to the redemption rate for National Gold Rewards members who are also Qantas Frequent Flyer members following a request from the Federal Treasurer, Mr Peter Costello", Mr Bhojani said.

"NAB previously represented to consumers that NAB points could be redeemed at a rate of 1 National Gold Rewards point for 1 Qantas Frequent Flyer point. However, last month the NAB foreshadowed a rate change effective from the 15 June 2002, that 1.5 National Gold Rewards would be needed to redeem 1 Qantas Frequent Flyer point.

"If this change had taken effect, it would have devalued NAB points accrued before 15 June 2002 by one third. The ACCC was concerned that by retrospectively changing the redemption rate, NAB risked misleading consumers by misrepresenting the value, characteristics, uses or benefits of the consumer's National Rewards points.

"NAB has informed consumers that it will maintain the 1 for 1 conversion rate for Qantas Frequent Flyer points earned prior to their July 2002 credit card statement cycle. From July 2002 the conversion rate for new NAB points accrued after that time will be 1.5 NAB points for 1 Qantas Frequent Flyer point, reflecting changes made to other NAB rewards.

"NAB has provided the ACCC with a written response confirming this statement.

"Complaints made to the ACCC about loyalty programs indicate consumers are feeling misled by the promotion of these schemes, especially Frequent Flyer style programs that focus on the trips and special deals members can obtain, with limited mention of the restrictions imposed by the schemes' terms and conditions.

"Loyalty program promoters risk misleading consumers and breaching the fair-trading provisions of the Trade Practices Act 1974 if they:

  • advertise awards that are not available as represented

  • hide in the fine print or fail to disclose the truth about the restrictions imposed on the redemption of those rewards

  • seek to retrospectively change programs or offers to the disadvantage of consumers.

"The ACCC will continue to monitor consumer complaints received about the operation and conduct of loyalty programs".

Release number: 
MR 145/02
Media enquiries: 
Ms Lin Enright - (02) 6243 1108