By Alexander Chiu, Journalist of CNEWS, Taipei
CNEWS received a complaint from Mr. W, a user of DBS’s “World Travel Card,” alleging his card was terminated without reason, resulting in the forfeiture of 472,414 accumulated flight miles without adequate explanation from the issuing institution. Lawyer Chen Yaping, the Secretary-General of the Consumer Foundation stated on the 17th that regulatory bodies overseeing issuing banks, including the Financial Supervisory Commission (FSC) and the courts, have the authority to sanction such unannounced card terminations if they harm consumer rights. The FSC can take administrative measures.
Chen pointed out that under legal provisions, credit card uses and conditions for card termination are specified. Banks and consumers enter into credit card agreements with clear stipulations on when a card can be terminated. This basic guarantee requires compliance with Article 11 of the “Standard Contractual Clauses for Credit Cards” before a card can be terminated. Currently, no valid reason for termination is evident.
Chen also emphasized that if a bank intends to terminate a card, agreements must be made in advance regarding the disposal of accumulated points or related benefits. Terms should include how points are to be utilized upon cardholder termination, rather than unilateral termination resulting in the cancellation of all rights without regard.
From a legal standpoint, banks must comply with agreements before terminating a card to ensure the protection of consumer rights. Agreements with consumers must be established beforehand; otherwise, termination cannot proceed in this manner.
Mr. W, the complainant, stated that the bank had no contact whatsoever throughout the process. All bank communications were sent to his company, handled by the accounting department, which confirmed no receipt of any notice. There were no overdue payments; the card was actively used. The termination occurred without prior notice, and despite extensive inquiries, the bank failed to provide a reason. Finally, the bank claimed “the right to terminate the card at any time with immediate forfeiture of points,” which Mr. W found unacceptable.
Chen noted that the FSC and the courts are the primary authorities overseeing issuing banks. They have the power to sanction in cases of card termination causing harm to consumer rights. The FSC can take administrative actions, while the courts use judicial means. Consumers can seek compensation for damages and restoration of cardholder rights, though legal proceedings typically take time.
Chen also advised reviewing the contract between the issuing institution and the consumer to determine if fairness was compromised. Unfair terms in such contracts may render clauses invalid under the law. However, she mentioned that specific provisions regarding losses due to card termination and their restoration are not explicitly detailed in credit card regulations.
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