The corporate watchdog is taking the group that provides several in-store credit cards to court, claiming GE Money engaged in misleading and deceptive conduct over limit increases.

In a statement this week, the Australian Securities and Investments Commission (ASIC) said action will be taken in the Federal Court, alleging GE Money told customers they had to consent to receiving unsolicited credit limit increase offers – or else it would not activate their credit card or give them a credit limit increase.

ASIC will claim that cardholder could do both, without consenting to receiving unsolicited offers.

GE Money offers credit cards including the GO Mastercard, Coles Rewards Mastercard, Myer Visa card and GE Money Mastercard.

As it stands, the maximum penalty on the cards for making false or misleading representations is $1.7 million for each contravention.

The case falls under laws which were amended just last year.

“New laws around the sending of credit limit increase offers were designed to assist consumers to actively choose how to manage their credit limit,” ASIC deputy chairman Peter Kell said.

The adjusted rules mean credit providers can make unsolicited written offers to increase credit card limits, but providers must obtain a customer's consent before sending an offer.

A spokesperson from GE Capital, of which GE Money is a division, said: “GE Capital takes ASIC's concerns very seriously and is working with ASIC to address its concerns.”