The Consumers' Foundation (消基會) yesterday accused banks of overcharging consumers, with revolving credit rates starting as high as 20 percent.
Government officials should act together to amend the law to narrow the gap between lending rates and rates paid on savings accounts, Terry Huang (黃怡騰), a member of the foundation's legal commission, said at a press conference.
The savings rate now stands at around 1 percent at major banks, while the revolving credit rate applicable to both credit cards and cash-advance cards hovers at around 20 percent.
According to Article 203 of the Civil Code, banks are entitled to charge up to 20 percent on lending.
"That's unreasonable. What the banks are doing is no different from what loan sharks do, and consumers are exploited," Huang said.
On the other hand, increased use of credit cards and cash-advance cards may increase the risk of bad loans for the banking sector over the next two years or so, Taiwan Ratings Corp (中華信評), a local arm of Standard & Poor's, warned late last year.
"Because the credit-card and cash-card business mainly targets young people, who are vulnerable to getting into trouble with their spending, we believe it's time for us to alert consumers," Huang said.
The foundation yesterday also charged that banks ask consumers to pay commissions and transaction fees about which they have no knowledge when they apply for their cards -- be they credit cards or cash cards.
Banks should be more transparent in their policies, Huang said.
"Whether banks should charge additional commissions and transaction fees is a political and legal matter," said Jason Lee (
The foundation said consumers have the right to know all details about their accounts.
The foundation also called for the current lending rate cap to be replaced with an adjustable rate. But the Bankers' Association ROC (
"If interest rates are variable, it will be a burden for the legislature," said the secretary-general of the association, Kuo Yu-chyi (郭玉麒).
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