By Zhang Xiaoyi, Wang Zhaobin and Xie Dongming, Journalists of CNEWS, Taipei
Mr. W applied for the DBS Bank Flying World Card in Taipei in 2019, and it was issued on August 5 of the same year. However, on November 16, 2023, Mr. W’s credit card was abruptly canceled without any prior notice, resulting in the loss of 472,414 accumulated flight points. In response, Lin Yuhui, a strategic director at Bo Heng Law Firm specializing in commercial litigation and financial disputes, suggests that cardholders can file a complaint with the Financial Ombudsman Institution. They can also claim for damages on the grounds of the financial institution’s breach of contract or tort.
Mr. W stated that he had always paid the annual fee on time and cleared the card balance every month during the use of the credit card. He could not understand why DBS Bank canceled his card. Despite multiple inquiries to DBS Bank, he received no reasonable explanation, nor did the bank disclose his total spending amount.
Lin Yuhui explained that according to the Financial Consumer Protection Act, if a cardholder disputes the card cancellation, which constitutes the termination of the credit card contract, it is considered a financial consumer dispute under the Act. Consumers can opt for the procedures stipulated by this law.
According to Article 13 of the Financial Consumer Protection Act, financial consumers must first file a complaint with the financial service provider for financial consumer disputes. The provider must appropriately handle the complaint within 30 days from the date of receipt and notify the financial consumer of the result.
If the financial consumer is dissatisfied with the result or if the provider fails to handle the complaint within the 30-day period, the consumer can apply for mediation with the dispute resolution institution within 60 days of receiving the result or the expiration of the period. If a complaint is filed with the Financial Ombudsman Institution, it will be forwarded to the financial service provider for handling.
Lin Yuhui noted that for disputes over financial consumer complaints, mediation applications can be made according to Articles 29 and 30 of the Financial Consumer Protection Act. The Ombudsman Institution must produce a mediation report and deliver it to the parties. The parties must notify the institution in writing within the deadline specified in the report, indicating whether they accept or reject the mediation decision. Once both parties accept the mediation result, the financial consumer can apply to the court for confirmation of the mediation report within 90 days, after which it has the same effect as a final civil judgment.
Lin Yuhui pointed out that if consumers do not file a complaint with the Ombudsman Institution and suffer damage due to the financial institution’s non-compliance with the standardized credit card contract, they can claim damages for breach of contract or tort by providing relevant proof of the damages suffered.
Lin Yuhui emphasized that the Financial Supervisory Commission has already announced the standardized credit card contract according to Article 17 of the Consumer Protection Act. Therefore, if the financial institution’s standardized contract violates the announced standard contract, the terms of the standardized contract are invalid. Additionally, according to Article 56-1 of the same law, the violating financial institution may face administrative fines.
Moreover, financial institutions must ensure the truthfulness of their advertisements, promotions, and marketing activities and must not engage in deceptive, fraudulent, or misleading practices. If any violation causes damage to financial consumers, the institution is liable for compensation under Article 11 of the Financial Consumer Protection Act.
Furthermore, lawyer Zhang Kexi from Xin Xin Law Firm stated that credit card contracts are standardized. Unless otherwise specified in the contract, banks have no reason to cancel a card at will. He noted that if cardholders have paid the annual fee and cleared the monthly balance, the bank should explain the specific clause and reason for the cancellation. Otherwise, it violates the credit card contract agreement between the two parties.
A senior credit card department staff member explained that common reasons for card cancellation include unpaid card balances, overdue payments on related loans such as mortgages and car loans, and serious issues like abnormal personal credit, such as bounced checks. Disputes with the bank can also lead to reevaluation of the cardholder’s creditworthiness and potential card cancellation. However, unless there are credit abnormalities, forced card cancellation is typically an individual bank’s measure and does not affect the cardholder’s dealings with other banks.
Photo Source: CNEWS File photo
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