Sunny Bank

766th Commissioners' Meeting (2006)

Case:

Sunny Bank was complained for violating the Fair Trade Law by failing to concurrently provide two home loan plans, Anytime Repayment and Repayment with Limited Terms, for borrowers' free option when entering into contracts, a conspicuously unfair conduct able to affect trading order

Key Words:

commercial bank, interest rate, loan plan

Reference:

Fair Trade Commission Decision of July 13, 2006 (the 766th Commissioners' Meeting); Disposition (95) Kung Ch'u Tzu No. 095106

Industry:

Domestic Banks (6213)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:
  1. This case originated from a complaint letter filed by the public saying that Sunny Bank violated the Fair Trade Law by failing to concurrently provide two home loan plans, “Anytime Repayment” and “Repayment with Limited Terms”, for the complainant to select when the complainant was entering into a contract with Sunny Bank.
  2. Findings of FTC after investigation:

    Sunny Bank claimed that the plans of “Anytime Repayment” and “Repayment with Limited Terms” employed in 2004 were decided by the interest rate of about 3%. In other words, borrowers may choose “Anytime Repayment” with an interest rate of over about 3%, or they may choose “Repayment with Limited Terms” with an interest rate of lower than about 3%. However, based on the information of home loan borrowers between July and December, 2004, Sunny Bank's practice was inconsistent with what it claimed. In addition, Sunny Bank claimed that the only difference between the two programs as mentioned above was the interest rate, and that all other loan requirements were identical. It was found, however, that there were 6 different loan interest rates and interest rate adjustment methods and 4 principal and interest repayment methods, a.k.a. loan requirements. Whether or not a borrower had chose “Anytime Repayment” or “Repayment with Limited Terms,” he/she would have had different loan requirements. Therefore, it is proved that Sunny Bank's statement is untruthful. Moreover, Sunny Bank admitted that it only verbally explained the differences between the two loan plans and had not been able to submit any specific proof to support that it had provided the interest rate calculations and loan requirements of the two loan plans to the borrowers. Thus, it is certain that Sunny Bank had violated Article 24 of the Fair Trade Law by failing to truthfully provide the aforesaid two loan plans for borrowers' option.

  1. Taking into consideration the motivation, purpose, and expected improper benefit of the unlawful acts of Sunny Bank; the degree and duration of the acts' harm to trading order; benefits derived on account of the unlawful acts; scale of the enterprise; types and number of and intervals between past violations; and remorse shown for the act and attitude of cooperation in the investigation, the FTC ordered Sunny Bank to immediately cease these unlawful acts and imposed an administrative fine of NT$400,000 in accordance with the fore part of Article 41 of the Fair Trade Law.

Appendix:
Sunny Bank's Uniform Invoice Number: 16091049

Summarized by Ho, Yin-Ju; Supervised by Tai, Pei-Yi

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