Key Information

inSight
Speeches
Speeches by Speaker
Norman T.L. Chan
Peter Pang
Eddie Yue
Arthur Yuen
Zeti Akhtar Aziz
Raymond Li
Edmond Lau
Esmond Lee
Meena Datwani
Vincent W.S. Lee
James Lau
Joseph Yam
Y K Choi
William Ryback
David Carse
Tony Latter
Andrew Sheng
Hans Genberg
Simon Topping
Michael Taylor
The Honourable Donald Tsang
Chen Yuan
Dai Xianglong
Don Brash
Jaime Caruana
Andrew Crockett
Mario Draghi
David Eldon
Stanley Fischer
Timothy F. Geithner
Stephen Grenville
Kenneth G. Lay
William McDonough
Ernest Patrikis
Glenn Stevens
Jean-Claude Trichet
Tarisa Watanagase
Zeti Akhtar Aziz
Carmen Chu
Alan Au
Press Releases
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
Press Releases by Category
Bogus Voice Message Phone Calls
Banking in Hong Kong
Fraudulent Websites, E-mails and Telephone System, and other fraud cases
Granting of Banking Licences
Exchange Fund
Table of Multiples of Notes and Payments for Allotted Amount under non-competitive tender
Table of Multiples of Notes and Payments of Application Amount under non-competitive tender
Tender of Exchange Fund Bills and Notes
Tender Results of Exchange Fund Bills and Notes
Tentative Issuance Schedule for Exchange Fund Bills and Notes
Appointments and Departures
HKMA Pay Review
HKMA Publications
Speeches
The Hong Kong Mortgage Corporation
Hong Kong Note Printing Limited
Hong Kong Institute for Monetary Research
Exchange Fund Investment Limited
Others
Hong Kong Financial Infrastructure
International Relations
Investment Products Related to Lehman Brothers
Monetary Policy
Notes and Coins
Renminbi business
Credit Card Lending Survey
Monetary Statistics
Residential Mortgage Survey
Year 2000
Others
Guidelines and Circulars
Guidelines
Circulars
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
515.5995

Press Releases

Business Practices of Authorised Institutions in Relation to Credit Cards

The Hong Kong Monetary Authority (HKMA) today (4 October) released a set of proposals aimed at improving the business practices of authorised institutions (AIs) in relation to the provision of credit card services for consultation with the banking industry and the Consumer Council (see enclosed paper for details of the proposals). The proposals have been formulated by an Informal Working Group (IWG) on review of the Code of Banking Practice convened by the HKMA and comprising representatives of the Hong Kong Association of Banks and Deposit Taking Companies Association. In view of the increasing public concern about the practices of AIs in relation to the provision of credit card services, the IWG has accelerated consideration of these issues.

"It has become very clear that there is scope for improving the credit card practices of authorised institutions. This package of measures has been devised with a view to making credit card terms and conditions more consumer-friendly, and ensuring that they are consistent with applicable laws," said Mr Simon Topping, Executive Director (Banking Policy) of the HKMA.

In working out the relevant proposals, the IWG considers that the overriding principle is that the terms and conditions for credit card services should be "fair" and "transparent" to consumers. In particular, it is recommended that any cost indemnity provision in relation to recovery of debts contained in the terms and conditions should only provide for the recovery of costs and expenses which are of reasonable amount and which were reasonably incurred.

The IWG also proposes a series of measures to promote greater transparency of credit card services, including a requirement for AIs to highlight all major terms and conditions which impose significant liabilities or obligations on customers in the application forms for credit card services, and to follow a standardised method in calculating and quoting the annualised percentage rates (APRs) of interest for credit card lending. The latter measure should facilitate consumers' comparison between different charging structures which may be adopted by different AIs.

Another recommendation of the IWG is that except under exceptional monetary conditions, the APR of interest charged by AIs in respect of credit card lending should not exceed the limit stated in the Money Lenders Ordinance.

The IWG has also put forward two proposals to bring the existing practices of AIs more into line with international practices, to the benefit of consumers. First, it is proposed that, as long as a cardholder has not acted fraudulently or with gross negligence, his maximum liability for unauthorised transactions before a card loss is reported should not be higher than HK$500 (the relevant limit in the US and UK is US$50 and GBP50 respectively). Second, it is proposed that supplementary cardholders should not be held liable for the debts of principal cardholders.

"We believe this is a good set of proposals for consumers which addresses concerns raised about authorised institutions' business practices in the area of credit cards. Further measures in relation to other business areas will be proposed shortly as we continue our review of the Code, which we plan to complete by early in the new year," Mr Topping added.

Subject to the views collected from the consultation, AIs should implement the proposals within six months.

For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Jasmin Fung, Manager (Press), at 2878 8246 or

Hong Kong Monetary Authority
4 October 2000

Attachments:
Business Practices of Authorised Institutions in Relation to Credit Cards
Annex: Calculation of Annualized Percentage Rate in Relation to Credit Card Products
Appendices 1 and 2

Last revision date: 1 August 2011
ABOUT THE HKMA
The HKMA
Tender Invitations
Careers@HKMA
Legislative Council Issues
Links
The HKMA Information Centre
KEY FUNCTIONS
Monetary Stability
Banking Stability
International Financial Centre
Exchange Fund
PUBLICATIONS & RESEARCH
Annual Report
Half-Yearly Monetary & Financial Stability Report
Quarterly Bulletin
HKMA Background Briefs
Reference Materials
Research
MARKET DATA & STATISTICS
CMU Bond Price Bulletin
Economic & Financial Data for Hong Kong
Monthly Statistical Bulletin
Monetary Statistics
KEY INFORMATION
Press Releases
Speeches
Guidelines & Circulars
Forthcoming Events
inSight
OTHER INFORMATION
Information in Other Languages (Bahasa Indonesia, हिन्दी, नेपाली, ਪੰਜਾਬੀ, Tagalog, ไทย, اردو)
Account Opening
Consumer Corner
Consumer Education Programme
Complaints about Banks
Complaints about SVF Licensees
Internet Banking
Fraudulent Bank Websites, Phishing E-mails and Similar Scams
Be Careful of Bogus Phone Calls and SMS Messages
Authenticate the Callers and Bank Hotline Numbers
Register of AIs & LROs
Register of Securities Staff of AIs
Register of SVF Licensees
Investment Products Related to Lehman Brothers
Photo Gallery