Customer right to question bank charges

A BEIJING-BASED NEWS ANCHOR recently sued a local branch of China Construction Bank, a year after the bank charged him 300 yuan ($43) simply because he forgot to pay the 69-yuan repayment. Beijing Youth Daily commented on Thursday:

The news anchor found it shocking that he was charged such high interest. Yet the bank argues that the interest charge was based on the total sum of his debt in that month, not the just the repayment part.

Many banks still adopt such a controversial, questionable approach, which should have been abolished a long time ago. Imposing extra interest charges on credit card users is beyond common knowledge and transactional customs. Generally, a debtor pays interest on the principal, or the original amount of a loan, and is rarely required to pay interest on the full amount.

In most cases, credit card applicants are informed about the benefits they can receive by using the card, which range from a flexible transaction limit to low-interest repayment installments. Often they are not fully aware of the charges that accompany an overdue payment, and the bank staff will not bother to inform them.

Card holders are supposed to pay their debts on time and accept the penalties should they fail to do so. But they have every right to question any charge that is not in the terms and conditions set out by the card providers. Banks are right to hold unruly debtors to account. But there are better ways of dealing with those who don't make their repayments.

The authorities should work out binding regulations so that dishonest borrowers face the legal consequences.