A month after being taken to court for allegedly breaching design and distribution obligations in the management of its David Jones cards, American Express has lost the DJs card issuing contract to Latitude Financial Services.
Latitude announced yesterday that it has secured an exclusive 10-year agreement to provide credit cards for the department store group.
Latitude said it expects to start issuing cards in September. It plans to acquire the existing card portfolio following the formal expiry of DJs’ partnership with Amex.
According to a media report last week, the retailer has already been in contact with its Amex card holders to tell them the partnership is ending.
In December, ASIC took Amex to court alleging that by early 2022 the company was aware that the cancellation rates for consumers who applied for the cards in David Jones stores were high, and significantly higher than cancellation rates for credit cards applied for online.
It also alleged that Amex knew some consumers were confused about whether they had applied for a loyalty card or a credit card and that this was a circumstance that indicated the target market determinations for the cards were not appropriate.
It claimed the under its design and distribution obligation ASIC was obliged to stop issuing the cards and review their TMDs. It delayed doing this, which ASIC alleges was a breach of the DDO.
Latitude said it will be offering David Jones’ customers additional benefits, while retaining most of the features of the current cards.