October 2008
The Court of Appeal has ruled out that, the annual fee charged by banks for credit cards is unlawful.
The 13th of Division of Court of Appeal decided in a decision, which was dated 26 September 2007 and numbered 2008/4345 E. and 2008/6088 K. that an unfair term of the contract between bank and consumer in relation to annual card fee was decided as null and void.
The background of the appeal was to reverse the decision which was given by Zonguldak Arbitration Committee for Consumer Problems and was related to refund of annual fees of credit cards collected by the claimant bank from the defendant consumer upon request of the defendant.
The Committee rendered that, the bank was entitled to charge the annual card fee in return for its service and thus the collected fee was lawful as per the terms of the credit card contract between the parties. The decision was appealed by the Chief Public Prosecutor of Court of Appeal in consideration of public interests although the decision was unappealable due to the amount of the claim.
Dispute between the parties was whether the bank was entitled to charge annual card fee in return of their service delivered to the credit card user according to the related regulation and the credit card contract.
The Act on Bank Cards and Credit Cards (Banka Kartlarý ve Kredi Kartlarý Kanunu) Section 6 Art 24/ subparagraph 1 states that “ Within the scope of this Act and other related rules and regulations, the agreement between the bank or other financial institutions issuing the card (Creditor) and Cardholder shall be written in black bold characters at least 12 font size. The copy of the agreement shall be given to the Cardholder and the Guarantor, if any. The inclusive information must be given to the Cardholder regarding the terms and conditions of the agreement and to use of the card.”
Further, the last sentence of the subparagraph 4 also states that “the credit agreement must not contain unfair, unilateral terms and conditions which harm Cardholder in favour of the Creditor.”
Act no 4077 on Consumer Protection as Amended by Act 4822 Art 6 regulates unfair contract terms and states that “Contractual terms between seller/ supplier and consumer shall be regarded as unfair if, they put into a contract unilaterally without being individually negotiated with consumer, if causes a significant imbalance in the parties` rights and obligations arising under the contract as contrary to requirement of good faith to detriment of the consumer. If unfair terms in a contract concluded with a consumer, they shall not be binding on the consumer. A term shall be regarded as not having been individually negotiated where it has been drafted in advance and therefore the consumer has not been able to influence of the substance of term especially in case of a standard contract. Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assessment of the contract indicates that it is a standard contract. Any seller or supplier who claims that a standard term of a contract has been individually negotiated with a consumer, the burden of proof shall be incumbent on him.
Consumer contracts which are required to drawn up in accordance with Art 6/A, 6/B, 6/C, 7, 9, 9/A, 10, 10/A and 11/A shall be drawn up in writing with 12 font size and in black bold characters.”
Beside that, the Regulation on Unfair Contract Terms in Consumer Contracts ( it is based on Art 6 and 31 of the Act on Consumer Protection ) Art 7 states that “ The unfair contract terms between consumer and seller, supplier or creditor shall be regarded as null and void.”
In the light of the above, the Court of Appeal analyzed and outlined that, the contract dated 22.12.1995 between the parties was a standard contract and was completed by filling the empty spaces with numbers, name and address of the consumer. It was further noted that, the contract was not drawn up in 12 font size and in bold black characters. Moreover, the claimant bank did not argue nor prove that standard contract terms, which oblige the cardholder to pay the annual card fee, had been individually negotiated with the consumer. As a matter of these facts and according to referred rules and regulations on consumer contracts, the annual card fee should be declared as unfair. Therefore, the bank was not entitled to charge annual credit card fee to the consumer by virtue of referred term of the contract.
Consequently, the 13th Division of the Court of Appeal has been reversed the decision delivered by Zonguldak Arbitration Committee for Consumer Problems.
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