Lawmaker attacks credit card bonus point schemes

Taiwan Solidarity Union (TSU) Legislator Tseng Tsahn-deng (曾燦燈) yesterday challenged the legality of the two year deadline for redeeming credit card bonus points set by many banks.

To promote the use of credit cards, many banks have schemes that allow card holders to accumulate bonus points every time they use their card. Card holders may then redeem the bonus points for various merchandise.

Most of banks restrict validity of the bonus points to two years, the legality of which is questionable, Tseng Tsahn-deng (曾燦燈) told a press conference, adding that "according to the Civil Code (民法), points should be valid for at least five years."

Article 126 of the Civil Code states that "the right to demand redemption of ?bonuses ? shall expire if not exercised for five years."

But, the code does not specifically mention credit card schemes.

In response, Lin Tung-liang (林棟樑), secretary-general of the Banking Bureau, said at the press conference that there was no legal issue on a time restriction placed on redemption of credit card bonus points.

"Credit card bonus points are different from the bonus points mentioned in the Civil Code," Lin explained, "credit card bonus point schemes are only a marketing strategy."

Besides, credit card holders are notified 60 days before the expiration of their bonus points, as they are required to be by the Banking Bureau, he added.

Lin's explanation failed to convince representatives from the Consumer Protection Commission (CPC) and the Fair Trade Commission (FTC).

Director of the legal division of the CPC Chiu Hui-mei (邱惠美) argued that "the nature of [credit card] bonus points is still the topic of a legal debate."

The FTC official urged banks to make it clear to card holders that bonus points could expire.

Both representatives agreed that revising relative laws and regulations would help to clarify the controversy.