Sat, Oct 21, 2006 - Page 12 News List

Foundation slams banks over credit award program

By Jackie Lin  /  STAFF REPORTER

A consumer advocacy group yesterday accused issuers of co-brand credit cards of disregarding cardholders' rights and interests by unilaterally changing contract terms.

The Consumers' Foundation (消基會) said several banks have revoked credit card award programs even before their contracts have expired.

For example, holders of the Chinese Petroleum Corp (中油) co-brand cards issued by Chinatrust Commercial Bank (中國信託商銀) were recently informed that starting Dec. 1, bonus points accumulated from purchases at CPC gas stations can no longer be used as a deduction for their car mortgages.

"Seeing their profits shrink, some banks have neglected consumers' rights by changing or canceling the terms," the foundation said in a press release.

"Contracts should be honored by both sides and must not be breached without legitimate reasons," it added.

Controversies also lie in the flawed regulations governing this area, the foundation said.

According to rules issued by the Financial Supervisory Commission (FSC), banks are allowed to amend the contracts as long as they inform the cardholders in writing 60 days in advance.

Caught in the middle, consumers are either forced to accept the changes or cancel the cards.

The foundation called on the FSC to amend the unfair regulation and demanded that financial institutions map out various complementary measures to better protect cardholders' interests.

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