Decision Of 13th Civil Chamber Of High Court Of Appeals Regarding Application Of Credit Card Fees

June 2011

The surcharges imposed on consumers by the banks under the name of “fees” have been a subject of a debate for a long time. In order to inform the consumers better and to have the discussions diminished, the decision of 13th Civil Chamber of High Court of Appeals dated 07.02.2011 and numbered 2010/3958 – 2011/1717 (the “Decision”) shall be examined below.

In the Decision, it is stated that the Bank has requested from the credit card holder (“Consumer”) to give consent for a specified amount of charge for the credit card with a notification and the card shall be blocked if otherwise acted. Upon the contrary action to such request by the Consumer, the credit card has been blocked by the bank. The Consumer claimed a reinstatement by unblocking the card and further, moral indemnity awards resulting from the blocking.

The Bank responded that none of the banks shall be obliged to issue credit card to anyone who requests, and if it is issued, none of the parties of an agreement can be forced to continue to execution of the agreement and that both of the parties shall be entitled to terminate credit card agreement at any time.

The Court of First Instance stated in its decision that the credit card could not be blocked since the Bank can not cease or refuse for providing service unless there is a justifiable cause.

Upon the appeal against the decision, the High Court of Appeals reversed the judgment with following justifications:

  • The freedom of contract may be limited only by public order.
  • Everyone is free to conclude any agreement and may not be forced to continue to execution of agreements. The exception of this principle is the “participation agreements” concluded by public administration and institutions conducting public services.
  • The banks are not considered as institutions for providing public services but institutions for making profit. Hence, the agreement between the banks and Consumers may not be accepted as “participation agreements”. Accordingly, the banks may claim a fee for their service.
  • Besides, using of credit cards results also in risk and cost for the banks. Thus, it is usual that the risk and the cost may be reflected to the Consumer.

As a result, termination of the agreement and transaction for blocking the credit card for use shall be evaluated within the framework of freedom of contract and the Bank may not be obliged to conclude this agreement in the situations where the Consumer is not willing to pay the credit card fee and in particular when the agreement does not contain any stipulation that the credit card fee cannot be charged to the Consumer.