False Advertising. The Losing Party – Chinatrust Fined for NT$500,000.

Chinatrust Commercial Bank (“Chinatrust”) commenced a promotion campaign during the end of 2009 -- “A complimentary upgrade to business class on the High Speed Rail” with bonus points gained from using its platinum credit cards.  As there are limited seats reserved for the promotional activity, many customers were not able to enjoy the benefit of free upgrade.  In other words, dispute over false advertising resulted from the promotion.

The Fair Trade Commission (FTC) held that Chinatrust’s television commercials failed to mention that there are only limited seats available for the promotional activity.  Chinatrust may mislead customers into believe that they can simply use their credit cards’ bonus points for complimentary upgrade to business class on the High Speed Rail Station.  The FTC fined Chinatrust with an amount of NT$500,000 regardless that the subject bank has posted advertising statements including “limited complimentary upgrade seats” and “limited upgradeable seats” on the internet, within the High Speed Rail Station and on the envelope of the billing statement, however, customers are unlikely to associate the said advertising statements with the circumstances that for each scheduled train, there is only limited seats reserved for the bank to participate in the promotional activity.

Chinatrust appealed, however the court dismissed its appeal.  The subject bank then filed an administrative appeal with the Taipei High Administrative Court.  Chinatrust alleged that every second of television commercials is crucial, in other words only important trading information will be mentioned.  In addition, wordings such as “limited upgradeable seats” are stated in commercials posted on the Internet and posters, which can be regarded as evidence to support that no false advertising was ever intended in such promotion campaign.

In consideration that Chinatrust was fully aware of the fact that Taiwan High Speed Rail Corporation (THSR) does not guarantee to provide sufficient or fixed number of seats per frequency of train service when entering into the contract; however, Chinatrust did not disclose specific information regarding the limited complimentary upgrade seats in its advertisements, the Taipei High Administrative Court ruled against Chinatrust.  An appeal is still possible.  (2010.11)

Source: Taipei High Administrative Court docket number: (99) Su-Zi No. 1646 [2010]
/DC