Complaint asserting that the China Trust Company Limited violated the Fair Trade Law by failing to deliver receipts for a housing loan and collecting mandatory account maintenance fees as well as life and accident insurance fees

Chinese Taipei

Case:

Complaint asserting that the China Trust Company Limited violated the Fair Trade Law by failing to deliver receipts for a housing loan and collecting mandatory account maintenance fees as well as life and accident insurance fees

Key Words:

account maintenance fees, housing loans

Reference:

Fair Trade Commission Decision of May 1, 2003 (the 599th Commissioners' Meeting); Letter (92) Kung Yi Tzu No. 0920003958

Industry:

Domestic Banks (6212)

Relevant Law:

Articles 24 of the Fair Trade Law

Summary:

1. The son of the complainant in this case applied for a housing loan from the China Trust Company Limited (China Trust) and, on the day of remittance of the loan payment, was required to pay a mandatory account maintenance fee. Furthermore, the applicant received successive life and accident insurance fee deductions, after which a complaint was filed with the Fair Trade Commission (FTC). Also, during the investigation by the FTC, China Trust failed to deliver a receipt for said loan to the borrower. The complainant asserted that these acts should be considered a deceptive or obviously unfair trading practice, and thus, in violation of the Fair Trade Law.

2. Following the investigation, the FTC found that, when processing home loans (including the loan to the complainant's son), China Trust did collect an account maintenance fee and this fact is confirmed by the signature or chop of the borrower on a separate form. Moreover, while processing these loans China Trust did take the opportunity to promote China Life's insurance products. The majority of clients, however, decided to purchase these products on their own initiative after hearing the presentation. Furthermore, in cases where the borrower did not purchase the aforementioned insurance products, they were not forced to do so. With regards to delivery of the loan receipt, there were two methods. The receipt was either handed over on the day the loan contract was signed, or mailed to the borrower following remittance. The FTC found that a few of those (including the complainant's son) who did not receive their receipt had changed their address. Furthermore, the borrowers in these cases did not apply for re-issuance of the receipt nor did they receive a blunt refusal from China Trust to deliver said receipt.

3. In summary, according to the results of this investigation, there is no reasonable basis for concluding that, when processing home loans, China Trust abused its superior market position and violated the provisions of Article 24 of the Fair Trade Law through either deceptive or obviously unfair acts such as knowingly concealing information with regards to extra charges, demanding unreasonable terms such as the mandatory purchase of China Life insurance, or refusal to provide a receipt for a loan agreement between the parties.

Appendix:

China Trust Company Limited's Uniform Invoice Number: 03077208

Summarized by Chi, Hsuen-Li; Supervised by Horng, Der-Chang