萬國法律事務所

In order to protect the rights and benefits of credit card holders, the Financial Supervisory Commission (FSC) has announced several new measures regarding credit cards. Some of the more important changes include the following:

1. The penalty charges to credit card holders must be a fixed penalty amount and the penalty must not be continuously charged for more than 3 months.

2. Once the earlier terms and conditions for use of bonus points collected in the credit card has expired and the points collected can still be used under the new terms and conditions, the Bank must inform credit card holders 60 days prior to implementation of the new terms and conditions.

3. Relief measures are added for situations where products or services prepaid for using credit cards are defective or unable to be used. Where the business of the prepaid products or services has terminated, the cardholders can apply for a refund on the prepaid items or services purchased by credit card provided that the credit card used by the cardholder is issued by the bank that is also the acquiring bank of the business.

Further, the Consumer Protection Commission (CPC) has approved the new Standard Credit Card Agreement, which includes clauses that state that the interests on credit balance shall only be charged on the unpaid portion and the supplementary card holder of the card holder is not jointly liable with the card holder on the outstanding credit balance.

FSC states that the penalty charges imposed on card holders who fail to make their minimum payments each month must reasonably reflect the operation costs incurred due to such breach and the banks must impose a fixed penalty amount that shall not be continuously charged for more than 3 months. In order to provide time for the banks to change their computer systems to accommodate these new measures, the FSC announced that these measures will not be implemented until October 21, 2010.

The FSC also stated that within the next 3 months, banks need to change their advertisements and application forms to include wording or slogans that alert the consumer to be smart and cautious in managing their funds. Information regarding interest on credit balance, cash advances and installments on credit balance must be indicated in a font size not smaller than 12 in the application form or relevant documents.

The new relief measures were introduced by the FSC for products or services prepaid by credit cards that were defective or subsequently unable to be used. The FSC reminds credit card holders that it is important for them to preserve the proof of purchase, such as sales agreements, in order to protect their rights and also to facilitate handling of future claims.

The CPC is also working to protect the interest of credit card holders by limiting the interest charges on credit cards. Under the new measures, if a consumer purchased an item for NT$ 3000 with a credit card and is only able to repay NT$ 1500, the interest shall only charged on the remaining NT$ 1500. The CPC believes that cardholders will benefit greatly from the newly drafted Standard Credit Card Agreement.