| 1 |
Issued by: Financial Supervisory Commission, Executive Yuan
Date of issue: 2007/10/11
Ref. No.: Jin-Guan-Yin (3)-Zi-09600415530
Subject: We have received the revised consumer protection measures with respect to auto loans extended by financial institutions (chattel mortgage) submitted by your Association. Please forward the revised measures to your member institutions for compliance accordingly.
Explanation: This is a reply to your Association letter No. Quan-Shou-Xiao-Zi-2221 dated September 13, 2007
TO: The Bankers Association of the Republic of China
cc.: Consumer Protection Commission, Executive Yuan (attachment included)
Attachment: Consumer protection measures with regard to auto loan extended by financial institutions (chattel mortgage)
1. When accepting a customer's application for an auto loan, a bank shall inform the customer that in case he or she fails to make payment according to the agreed terms and conditions, the bank is entitled to repossess the car and the customer shall bear the expenses incurred from the repossession proceedings.
2. When a bank repossesses a car in connection with the collection of auto loan payment, the bank should consider the reasonableness and principle of proportionality in executing the collection operation. Banks shall also set out the fee schedule for expenses incurred in the repossession and custody of car and post it on their website, and inform their customers the methods of inquiring the aforementioned fee schedule at the time the auto loan contract is signed.
3. Actions in case of late payment:
In case of late payment, a bank should notify the borrower to make payment or deliver the car by short message service (SMS), collection letter or telephone, and in view of the case, send staff to make visit. Before exercising its mortgage claim on the car, a bank should preferably have undertaken the collection and notification procedure (e.g. notified by legal attest letter) and may adjust its actions in view of the situation of individual cases.
4. Informing the scope of security and issue of lien release
When a bank extends an auto loan, the bank should inform the borrower the extent of debt secured by the car. When a customer inquires the balance on his or her auto loan in order to transfer the car to a third party, the bank should check whether the car is mortgaged to secure other debts with the bank (e.g. credit card or guarantee) and fully inform the customer to avoid consumer dispute arising from customer's failure to obtain a lien release from the bank after paying off the auto loan.
|