NSW Takes Decisive Steps Against Unlawful Merchant Fee Practices

1

During a review of the 2023-24 financial statements, the NSW Auditor-General highlighted the issue of unauthorized fee surcharges. The revelations were surprising, bringing the matter forcefully to the notice of the current administration.

For years, legal advice from the Crown Solicitor's Office, beginning in February 2016 through December 2022, consistently warned against the unlawful imposition of merchant fees by Service NSW. Despite such advice, over 92 million transactions incurred charges close to a whopping $144 million. The surcharges, conceptualized as cost recovery for transaction fees by payment providers, were initially sanctioned by NSW Treasury in 2012.

The spotlight is on mini transactions such as 30 cents for a driver's licence renewal, 29 cents for a marriage certificate, and a $1.92 fee to renew a small car registration. These seemingly small fees added up, creating a significant financial burden on the public.

With this information now public, the current government, led by the Minns Labor administration, has moved swiftly, creating a dedicated incident management taskforce to stem these unauthorized charges and to mitigate future occurrences.

Notably, customers affected by these charges are urged to register for updates regarding the government's corrective measures through Service NSW channels either online at the official website or via their service hotline.

The Ministers for Customer Service, Digital Government, and Finance, have sought an independent inquiry by requesting the NSW Ombudsman to investigate potential maladministration. The department's Secretary has also escalated the case to the Ombudsman and the Independent Commission Against Corruption, highlighting concerns over ignored legal advice.

A proactive approach by the new taskforce has successfully shut down over 80% of unlawful surcharges in Service NSW transactions and more than 90% of online payments. For now, all other remaining transaction fees, including those from in-person credit card terminals, are being rapidly phased out. To accommodate citizens, Service Centres are offering surcharge-free payment alternatives, such as cash payments.

Amid ongoing remedial undertakings, the NSW government has instructed all departments to audit their merchant fee practices by the end of November to ascertain legal oversight and compliance, echoing Minister for Finance Courtney Houssos’s comments: “Families, households, and businesses expect governments to act within the confines of the law.”

Minister Jihad Dib also emphasized the urgency, stating: “Our priority has been to halt these charges swiftly.” He underscored the ethical need for transparency regarding the past continuation of these fees despite the legal advisories.

Published:Monday, 4th Nov 2024
Source: Paige Estritori

Share this news item:

Finance News

Clear

ASIC Releases Updated Legislation for Financial Advice

16 Sep 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has introduced a new, consolidated legislative instrument that relates to financial advice. This update follows through on ASIC's May announcement regarding the remake of three existing advice-related instruments. - read more

Commonwealth Bank Challenges RBA's Card Fee Reform

12 Sep 2025: Paige Estritori

Australia’s leading financial institution, the Commonwealth Bank of Australia, has openly criticised the Reserve Bank of Australia (RBA) for its calculations related to a proposed reduction in debit and credit card transaction fees. The RBA suggested that the reform would save Australian businesses $1.2 billion annually and benefit the majority of companies, a claim that the Commonwealth Bank strongly disputes. - read more

Ongoing Consumer Spending Surge Threatens Future Interest Rate Cuts

11 Sep 2025: Paige Estritori

Amid a period of robust consumer spending, Australia's mortgage holders may face limited future interest-rate cuts. The Commonwealth Bank has observed Australians increasing their spending over the last six months, spurred by rising incomes, a robust job market, and previously lowered interest rates. - read more

CSLR Funding Concerns as Special Levy Decision Remains Pending

11 Sep 2025: Paige Estritori

The Compensation Scheme of Last Resort (CSLR) recently highlighted potential delays in compensation payments due to insufficient special levy funds. In July, the CSLR's proposed FY2025–26 levy plan allocated $67.29 million for financial advisers, surpassing the $20 million limit set for the subsector. This shortfall of $47.29 million prompted the Treasury to initiate a consultation in August to determine funding solutions for the excess levy. - read more

Retiree Surge to Drive Demand for Financial Advisers in Australia

10 Sep 2025: Paige Estritori

A recent study by Adviser Ratings, as outlined in the 2025 Australian Financial Advice Landscape Report, indicates that the number of financial advisers in Australia will need to increase significantly. From the present count of 15,500 advisers, the industry is expected to require more than 50,000 over the next thirty years to cater to a growing retiree population. - read more

Click for more Finance News