Violation of obligations in the credit card contract in Vietnam

Credit card is a card that allows the cardholder to make card transactions within the granted credit limit as agreed with the card issuer. Simply, a credit card is a card that allows you to make purchases first and pay the bank later. With such convenience, the number of people using this card is increasing day by day. Along with the widespread use of credit cards, disputes between banks and users related to credit cards have also increased and become increasingly complicated.

Specifically, in the first-instance civil judgment No. 64/2020/DS-ST dated November 26, 2020 on a credit card contract dispute, the summary content is as follows:

“On September 13, 2018, Ms. Phan Thi Thuy O signed a contract to use a credit card with Joint Stock Commercial Bank S branch B (Bank). The Bank agrees to issue a credit card with a usage limit of VND 50,000,000 for personal consumption purposes. After being granted a credit card, Ms. Phan Thi Thuy O made transactions with a total amount of VND 254,479,965.

Since activating the card until now, Ms. Phan Thi Thuy O has paid the Bank 217,982,000 VND, then stopped paying. The bank repeatedly urged her to remind her but she still did not pay the debt. The Bank has terminated the right to use the card and transferred the entire outstanding balance to overdue debt. Because Ms. Phan Thi Thuy O violated the contract, Commercial Joint Stock Bank S filed a lawsuit asking the Court to force Ms. O to pay the Bank the total amount temporarily as of November 26, 2020 of VND 76,441,753 , in which principal is 57,748,576 VND and interest is 18,693,177 VND. Interest will continue to be calculated from November 27, 2020 until Ms. O has paid off the debt at the interest rate agreed by the parties.

The People's Court of Hai Chau District, Da Nang City has accepted the petition of Joint Stock Commercial Bank S, forcing Ms. O to pay an amount of VND 76,441,753, of which the principal is VND 57,748,576 and a profit of VND 18,693,177 to the Bank for breach of contract between the two parties.

However, the Court has repeatedly summoned Ms. O, but she is still absent without reason, causing difficulties for the settlement of the case as well as the execution of the judgment.

Article 91 of the Law on Credit Institutions 2010 stipulates as follows:

Article 91. Interest rates and fees in business activities of credit institutions

“ 1. Credit institutions are entitled to fix and publicly post up interest rates for capital mobilization and service provision fees in business activities of credit institutions.

2. Credit institutions and customers have the right to agree on interest rates and fees for credit extension in the credit institution's banking activities in accordance with the law.

3...."

Besides, the Court has determined that the credit card contract between S Commercial Joint Stock Bank and Ms. Phan Thi Thuy O is a property loan contract. Therefore, the Court relied on Articles 463 and 466 of the 2015 Civil Code as follows:

Article 463. Contracts for loan of property

"Contract for the loan of property means an agreement between parties whereby a lender delivers property to a borrower. When the loan falls due, the borrower must repay the lender property of the same type in accordance with the correct quantity and quality, and must pay interest if so agreed or so provided by law."

Article 466. Obligations of borrowers to repay loans

"1. Where the property lent is a sum of money, the borrower must repay the lender the loan in full when due. If the property is an object, the borrower must deliver to the lender an object of the same type, quantity and quality, unless otherwise agreed.

2. Where a borrower is not able to deliver an object, it may, with the consent of the lender, repay the value of the borrowed object, in cash, as at the time and place of delivery.

5. If a borrower fails to repay, in whole or in part, a loan with interest, the borrower must pay:

a) Interest on the principal as agreed in proportion to the overdue loan term and interest at the rate prescribed in Clause 2 Article 468 in case of late payment;

b) Overdue interest on the principal equals one hundred and fifty (150) percent of the interest rate in proportion to the late payment period unless otherwise agreed."

In the above judgment situation, Ms. Phan Thi Thuy O violated her obligations with Joint Stock Commercial Bank S, specifically, she did not repay the credit card payments to the Bank. Therefore, the determination of the overdue debt and interest of the Bank and the Court is in accordance with the provisions of the law of Vietnam.

It can be seen that the use of credit cards in payment and payment for transactions in daily life has gradually become popular because of its convenience and speed. However, along with more and more people signing up to use credit cards, disputes arising over credit card contracts between individuals and credit institutions become more complicated and difficult to resolve. Therefore, courts need to uniformly apply the provisions of the law and adopt the practice of revolving credit card disputes to learn from experience in order to more effectively resolve cases related to credit card contracts. credit card use.