Newsletter
FTC ADVISES CARD ISSUERS TO WARN CONSUMERS ON INTEREST RATES
The Fair Trade Commission (FTC) has investi-gated allegations that the revolving credit interest rates, as high as 20%, charged by credit card issuers contravene the Fair Trade Law (FTL). The FTC found that competition in Taiwan’s credit card market is intense, and that the interest rates applied by the various card issuers for re-volving credit and for cash advances, as well as their methods of calculating interest and penalty charges, are not uniform. Thus the FTC could not conclude that card issuers had violated the FTC’s prohibition on concerted actions. Also, the levels of interest charged in Taiwan for re-volving credit were no higher than those in the United States, Britain, France, Hong Kong, and Singapore.
Nevertheless, the FTC expressed the view that there is a need for card issuers to more clearly disclose the interest rates, effects of contract violations, and method of calculating interest stipulated in their standard credit card agree-ments. The FTC has, therefore, recommended that the MOF amend the Regulations Governing Credit Card Business, to require card issuers to print the following warnings in bold red type on credit card application forms and standard agreements: "Revolving credit interest rates are higher than interest rates for other types of bank lending;" and "Calculation of interest from the transaction date is the most disadvantageous for the cardholder; calculation from the final pay-ment date is less burdensome for the cardholder."