Law on protecting the rights of consumers using domestic debit card services at commercial banks in Vietnam

The research object of the topic is the current regulations on protecting the rights of consumers using card services at commercial banks in Vietnam. Based on comparing the provisions of current laws with reality, the article analyzes and evaluates the advantages and disadvantages of the regulations in the practical application of laws related to protecting the rights of consumers using card services at commercial banks in Vietnam. From there, it boldly proposes a number of recommendations for continuing to develop laws on protecting the rights of consumers using card services at commercial banks in Vietnam in the coming time.

Scope of research: The thesis only clarifies general theoretical issues of the law on protecting the rights of consumers using card services at commercial banks in Vietnam such as regulations related to card activities at banks, regulations from the State Bank...

4. Methodology and research methods

In the process of approaching and solving the problems raised in the thesis, the author used the dialectical materialism method of Marxism-Leninism, the State's policies on related issues. In specific cases, the author combined the use of appropriate research methods such as statistics, comparison, analysis, synthesis... to combine theoretical and practical knowledge, contributing to clarifying the problem to be researched.

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5. Structure of the thesis

In addition to the Introduction, Conclusion, Table of Contents, and List of References, the Thesis is designed with three chapters as follows:

Chapter 1. Theoretical issues on the law protecting the rights of consumers using domestic debit card services at commercial banks in Vietnam.

Chapter 2. Current status of laws protecting the rights of consumers using domestic debit card services at commercial banks in Vietnam.

Chapter 3. Recommendations to improve and effectively implement legal regulations on protecting the rights of consumers using domestic debit card services at commercial banks in Vietnam.

1. CHAPTER 1: THEORETICAL ISSUES ON PROTECTING CONSUMER RIGHTS USING DOMESTIC DEBIT CARD SERVICES AT COMMERCIAL BANKS IN VIETNAM

1.1. Concept and characteristics of consumers using domestic debit card services at commercial banks in Vietnam.

1.1.1. Concept of "Consumers using domestic debit card services at commercial banks"

The concepts of “consumer” and “domestic debit card service” are very basic concepts, used throughout the provisions of the Consumer Protection Law as well as laws related to card operations of commercial banks. Because the focus of consumer protection law is the consumer, and “domestic debit card service” is an important basis for forming the relationship between the consumer and the supplier, the connotation of these concepts will be the guideline for other contents analyzed in this article, especially determining the scope of regulation of relevant laws.

First of all, with the concept of "consumer", looking at the overview of the regulations of some countries, it can be seen that the laws protecting consumer rights of each country have three ways of regulation, specifically as follows:

(i) The first way is to define consumers as individuals only . In the case of European Union (EU) Law, before there was a clear explanation, there was a dispute in 1991 in which the parties requested the European Court of Justice to explain the concept of consumers to include businesses when purchasing products and services not for business purposes. However, the European Court of Justice rejected this request and stated that consumers are only understood as individual consumers, not including other entities. [27] The concept of consumer in the legal documents on consumer protection of the European Union has been explained in Directive 1999/44/EC of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees. This Directive explains that ““Consumer is any individual …

enter into contracts covered by this Directive… for purposes unrelated to their business or profession” [28]

One case that also regulates consumers as individuals is Japanese law. Specifically, Article 2(1) of the Consumer Contract Law (i.e., contracts between consumers and merchants) of Japan in 2000 clearly explains: “As used in this Act, the term “consumer” means individuals (however, the same shall not apply in cases where said individual becomes a party to a contract as a business or for the purpose of business. As used in this Act, the term “business” means juristic person, associations and individuals Who become a party to a contract as a business or for the purpose of business . [29]. Roughly translated as “Consumers as prescribed by this law are individuals but do not include individuals participating in contracts as legal entities or for the purpose of business.”

This provision clearly shows that the consumer protection law only protects individuals, while legal entities, because they have better positions and conditions than individuals in their relationships with suppliers, do not need to intervene in their consumer relationships. However, this approach also has some limitations because according to the provisions of the law, legal entities have many types, including enterprises and other organizations in society. These subjects, in addition to themselves, also have normal consumer activities, but not all of their buying and selling relationships are commercial relationships. Therefore, in consumer relationships, they are not professionals and, like consumers, they do not have the resources to deal with violations from manufacturers and also need the protection of consumer protection laws.

(ii) The second way clearly stipulates the nature of consumers as both individuals and legal entities . According to this provision, consumers include both individuals and legal entities. Although this provision seems a bit broad, some may argue that it will dilute the effectiveness of the Law on Consumer Protection. However, this provision has overcome the limitations of the first provision because it does not

Legal entities are not always capable of dealing with violations from manufacturers and businesses, and as a result, if the Consumer Protection Law does not protect them as it does for other individual consumers, the rights of a fairly large group of people in society will be violated, causing damage to the whole society. Some cases such as the regulations of Thailand, India, Taiwan... The Consumer Protection Law of India in 1986 has some provisions as follows (Articles 2(1d) and 2(1m)): Article 2(1d): “Consumer means any person who purchases ... goods ... without the intention of resale or for other commercial purposes.” Article 2(1m) explains that the word “person” here is understood to include: companies (enterprises), individuals, households, cooperatives, social organizations. According to Thai law, the concept of consumer can include both natural and legal persons and they must be the buyer or user of the business's services. Although Thai regulations do not mention whether subjects who use goods and services but do not buy goods or hire services are consumers or not, there is an expansion to the stage of being offered or proposed to buy goods or use services. Thus, at the time of being offered or proposed to buy goods by the business, the above subjects are considered consumers and are protected under the provisions of the law on consumer rights protection. [14]

(iii) The third way is to not specify whether it is only an individual or includes both individuals and legal entities . This way of provision only says “who” or “those” like Malaysia. This way of provision can lead to many different interpretations and is difficult to apply in practice because it can be understood to include both individuals and legal entities, but can also be interpreted in the direction of only individuals.

Regarding Vietnamese law, Clause 1, Article 3 of the Law on Consumer Protection 2010 stipulates: “Consumers are those who buy and use goods and services for the purpose of consumption and daily life of individuals, families and organizations. Thus, Vietnamese law belongs to the third type of regulation as analyzed above. This makes it difficult to research related legal contents because each person's understanding of this issue is different.

However, in this study, the author, referring to the provisions of relevant laws as well as the understanding used mostly in practice, will understand NTD here to include both individuals and organizations that buy and use goods for consumption purposes.

Next comes the concept of "using domestic debit card services at commercial banks". According to Article 3 of Circular 19/2016/TT-NHNN regulating bank card activities: "Bank cards are means of payment issued by card-issuing organizations to conduct card transactions according to the Terms and Conditions agreed upon by the parties." Also in this circular, the State Bank has classified card types according to the payment nature of the card as follows: Debit cards are cards that allow cardholders to conduct card transactions within the amount and overdraft limit (if any) on the cardholder's payment account opened at the card-issuing organization. Credit cards are cards that allow cardholders to conduct transactions within the credit limit granted according to the agreement with the card-issuing organization. Prepaid cards are cards that allow cardholders to conduct card transactions within the value of money loaded into the card corresponding to the amount prepaid to the card-issuing organization. According to the State Bank of Vietnam, by the end of April 2014, the country had 52 card issuing organizations with more than 69.7 million cards issued, including 461 card brands. Of which, debit cards accounted for the largest proportion at 92.1%, credit cards were 3.7% and prepaid cards were 4.2%. In addition, according to research, the number of cases of infringement of consumer rights of debit cards also accounted for the largest proportion. Therefore, for the above reasons, in this article, the author will focus on studying the legal regulations on the issuance and transaction of domestic debit cards (commonly known as ATM cards).

Regarding the parties involved in using domestic debit card services, in practice they include the following entities:

(i) Issuing organization : is a credit institution or foreign bank branch authorized to issue cards in accordance with Article 9 of Circular 19/2016/TT-NHNN. The issuing bank will stipulate the terms and conditions of card use for cardholders to comply with.

(ii) Card accepting unit : is an organization or individual that accepts payment for goods and services by card according to a card payment contract signed with a card issuing organization.

(iii) Cardholder : is an individual or organization to whom the card issuer provides a card for use, including the primary cardholder and the supplementary cardholder. The primary cardholder is an individual or organization that signs the contract for card issuance and use with the card issuer . The supplementary cardholder is an individual who is authorized by the primary cardholder to use the card and the primary cardholder commits in writing to perform all obligations arising from the use of the card according to the contract for card issuance and use.

Considering the concepts related to “NTD” mentioned above, it can be seen that the cardholder will be placed in the position of an individual, an organization using banking services, or a NTD in the banking sector. With the understanding mentioned above that NTD includes both individuals and legal entities, this is completely reasonable and consistent with the legal provisions in specialized banking laws. This is also completely consistent with the issuance contracts or general transaction terms applicable to debit cards of commercial banks when the contract always has provisions on two subjects requesting card issuance: individuals or representatives of legal entities.

For a card transaction to be formed, two entities: the cardholder - the consumer and the issuing organization or the commercial bank - the service provider will sign a contract called "Issuance contract": "The contract for card issuance and use is a written agreement between the card issuer and the cardholder on the issuance and use of the card." [Article 3 of Circular 19/2016/TT/NHNN]. Regarding the nature of this issuance contract, through a number of cases and complaints about cards, it can be seen that some cardholders believe that the relationship between the card issuing bank and the cardholder is a relationship of depositing assets. The evidence for the existence of a relationship of depositing assets between the bank and the cardholder is the ATM card and the account in the cardholder's name at the bank. Therefore, the amount of money in the account is the asset that the cardholder deposits at the bank. Therefore, if the deposited property is lost or damaged (except in cases of force majeure), the bank holding the property must compensate the depositor for the damage [Articles 554 and 557 of the 2015 Civil Code]. However, based on the provisions of

According to Article 554 of the 2015 Civil Code, the assumption that the deposit relationship between the cardholder and the commercial bank is a property deposit relationship is not sufficient and not in accordance with the provisions of law for the following reasons:

(i) Firstly , the asset holder is a legal entity and performs this service for the purpose of making a profit (commercial bank), while the other party is an individual who deposits the asset with almost no business purpose (cardholder). The main purpose of the individual using the domestic debit card service at a commercial bank is not to enjoy interest at the non-term interest rate prescribed by the commercial bank but to store or facilitate payment for goods and services.

(ii) Second , there is currently no legal document defining assets, but only a provision listing "assets including objects, money, valuable papers and property rights" (Article 105 of the 2015 Civil Code). Therefore, the money in the cardholder's account is the asset that the cardholder deposits at the bank. However, this deposit is different from the deposited assets stated in the asset deposit contract as prescribed in the Civil Code. In the relationship between the cardholder and the card-issuing bank, the asset custodian (bank) is responsible for preserving the assets for the depositor (cardholder) but is not obliged to return the assets to the depositor when the contract expires. In case the cardholder has to return the exact amount that the depositor has deposited, the cardholder is not allowed to use the ATM card to withdraw cash or pay for goods and services during the effective period of the asset deposit contract. Furthermore, the contract for issuance and use of ATM cards between the bank and the cardholder is a civil contract with no fixed term and the party depositing the assets does not have to pay the custodian. For example, when opening an account, the cardholder deposits ten million VND to the bank, including 5 million VND in 500,000 VND bills, 3 million VND in 100,000 VND bills and 2 million VND in 50,000 VND bills with a specific serial number. This amount will be put into circulation by the bank and will no longer be the property of the cardholder immediately after deposit. Therefore, when using an ATM card to withdraw cash or pay for goods and services, the cardholder cannot receive back the amount he has deposited into the account at

bank and also has no right to request the bank to pay for goods and services with that same money.

(iii) Third , according to the provisions of the Civil Code, in the relationship of depositing assets, the depositor has the obligation to hand over the assets to the custodian and immediately notify the custodian of the status of the assets and appropriate preservation measures for the deposited assets. Compared with the relationship of issuing and using ATM cards between the card-issuing bank and the cardholder, the amount of money in the cardholder's account is not necessarily the money directly deposited by the cardholder at the bank, but can be money transferred from a third party through the bank's account system. The third party can be the employer paying the employee's salary, the buyer of goods and services paying for goods and services to the seller, service provider, etc.

Based on the above reasons, we believe that the relationship between the cardholder and the commercial bank is only a normal civil relationship and not one of the common civil contracts stipulated in the Civil Code such as the contract of deposit of assets that some cardholders mentioned above. Therefore, the general provisions on civil contracts in the Civil Code are applied to the relationship of card issuance and use between the cardholder and the card-issuing bank. In addition, the relationship between the cardholder and the card-issuing bank is also subject to the regulation of specialized laws such as Circular 19/2016/TT-NHNN regulating bank card activities.

Thus, from the above analysis, the author boldly proposes the concept of "Consumers using domestic debit card services at commercial banks" as follows: Consumers using domestic debit card services of commercial banks are individuals or organizations (through representatives) who register to open and use cards at commercial banks to conduct card transactions within the amount and overdraft limit (if any) on their payment accounts opened at that commercial bank, on the basis of an issuance contract in accordance with the provisions of law in accordance with the purposes and requirements of customers and credit institutions.

1.1.2. Characteristics of domestic debit card services and of consumers using domestic debit card services at commercial banks.