International Bank of Taipei was complained for violating the Fair Trade Law in collecting blank check processing fees

Chinese Taipei

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Summary:

1.  In a letter received in December 2001, the complainant alleged that beginning January 1st 2002, the International Bank of Taipei (the respondent) would collect processing fees of NT$30 per blank check from checking account clients with a monthly balance less than NT$10,000. The complainant stated that collection of the said fees violated the principles of fair trade and requested that the Fair Trade Commission (FTC) investigate the matter.

2. After investigation, it is the finding of the FTC that there were costs inherent in the operation of checking deposit business; it is within the bank's business discretion to decide whether those costs should be passed on to the consumers who use the services or whether the bank should absorb the costs. In the event that there has been no intent to deceive and conceal information or abuse their advantageous position to pressure consumers into paying the fees, it would be difficult to show any violation of law. Investigation by the FTC also found that the respondent had kept its customers informed of the processing fees beforehand by means of written contracts, public notices in their places of business and explanations by bank employees. Furthermore, it is apparent that the complainant was well aware of the said processing fees prior to their implementation by the bank and, consequently, it is difficult to maintain that the respondent intentionally concealed information relevant to the processing fees. Additionally, the respondent's market position in the domestic checking deposit market was limited. Given the differences between checking account deposits and other long-term contractual relationships such as time deposits and real estate loans, consumers questioning the ways the processing fees are calculated and collected may still have the option to decide whether to maintain business with the said bank or close their accounts and take the checking deposit business elsewhere. If the respondent elects to arbitrarily hike processing fees related to checking deposits, they must then face the consequences of the loss of clients through competition. As a result, it was difficult to conclude that the respondent relied upon its advantageous position to coerce consumers into paying the aforementioned processing fees.

3. According to the facts and evidence revealed by the investigation, while it was difficult to maintain that the respondent violated the provisions of Article 24 of the Fair Trade Law, there was room for improvement with regard to the means by which the respondent disclosed information, as well as the extent to which information was disclosed. To protect the rights of consumers and to ensure that they all have full access to relevant information in a timely fashion, the FTC issued a warning to the respondent directing that further steps be taken to ensure that detailed written notification to clients actively discloses information relevant to the rates of said processing fees and that fee collection begin only after clients have been actively notified of said fees.             

Appendix:

International Bank of Taipei's Uniform Invoice Number: 03511505

Summarized by Liang, Ya-Chin; Supervised by Horng, Der-Chang