a) The Board shall mean the Banking Regulation and Supervision Board; b) The Agency shall mean the Banking Regulation and Supervision Agency;

Transcription

1 Bank Cards and Credit Cards Act Statute Number: 5464 Enactment Date: 23 February 2006 Objectives Article 1: The objective of this Act is to ensure the effective operation of the card-based payments system by governing principles and procedures related to the issuance and use of bank cards and credit cards and to their clearances and settlements. Scope Article 2: Concerns which set up card-based systems, concerns which issue cards, and concerns which enter into merchant partner agreements as well as merchant partners and cardholders are subject to the provisions of this Act. Provided that the transactions shall be limited to their own places of business, private individuals and corporate entities which issue cards or devise systems for the purpose of keeping track of sales on account and of buyers debt/credit standings or which issue cards that are limited to a previously-determined amount without being involved in any sort of crediting transaction or being associated with an account are not subject to the provisions of this Act. Definitions Article 3: In the implementation of this Act: a) The Board shall mean the Banking Regulation and Supervision Board; b) The Agency shall mean the Banking Regulation and Supervision Agency; c) Bank shall mean any deposit bank, participation bank, or development and investment bank; d) Bank card shall mean any card that makes it possible to take advantage of banking services, including the use of deposit accounts or specialized current accounts; e) Credit card shall mean any printed card or any card number that otherwise lacks physical existence which makes it possible to purchase goods and services or to withdraw cash without necessitating the use of cash; f) Card-based system concern shall mean any concern which sets up a bank card or credit card system and which grants authorizations to issue cards or enter into merchant partner agreements in accordance with such a system; g) Card issuer shall mean any bank or other concern that is authorized to issue bank cards or credit cards;

2 h) Acquirer shall mean any bank or other concern that enters into agreements with places of business in order to gain such places acceptance of bank cards or credit cards; i) Merchant partner shall mean any private individual or corporate entity that agrees to sell goods or services or to supply cash to a cardholder within the framework of an agreement that has been entered into with an acquirer; j) Cardholder shall mean any private individual or corporate entity that takes advantage of bank card or credit card services; k) Receipt shall mean any document which is issued by a merchant partner on account of transactions performed with a bank card or credit card, which shows the cardholder s debt arising from a transaction and other information, and which is signed by the cardholder except in situations where the cardholder s identity is indicated by means of a code, a PIN, or other means of identification; l) Cash disbursement voucher shall mean any document which is issued when cash payments are made to a bank card or credit card holder by a bank or authorized merchant partner and which is signed by the cardholder except in situations where the cardholder s identity is indicated by means of a code, a PIN, or other means of identification; m) Payment-due date shall mean the last day on which a cardholder may pay off his current balance or make his minimum payment without going into default; n) Current balance shall mean the outstanding balance of all debit and credit entries made up to the billing date plus the previous billing cycle s overall balance; o) Minimum amount shall mean the minimum amount of the current balance that must be paid; p) Credit notice shall mean any document issued by a merchant partner to credit a cardholder s account in situations where goods or services obtained through the use of a bank card or credit card are returned or rejected; r) Notifications, demands, complaints, and objections shall mean any notification, demand, complaint, or objection that a cardholder makes in writing, electronically, or by telephone. Section Two Activities subject to licensing Operating license Article 4: Any concern that wishes to set up a card-based system, to issue cards, to be an acquirer, or to engage in the activities of sharing data, clearing, or settling must obtain a license from the Board. Such concerns must: a) Be set up as joint-stock companies;

3 b) Have founders who are possessed of the requisite financial strength and reputation, of the honesty and competence required by the business, and of such other qualifications as are sought in banks partners. c) Issue shares, all of which must be registered against payment in cash, and document the identities of the private individuals who control the management and audit of corporate founders; d) Be capitalized to the amount of no less than six million Turkish liras, all of which must be paid in cash and free and clear of any dissimulation; e) Have articles of incorporation that comply with the provisions of this Act; f) Have management, qualified personnel, and technical infrastructure that are capable of performing the transactions covered by this Act and form units that are concerned with complaints and objections; g) Adduce documentary evidence that five percent of the capital stipulated in paragraph (d) has been deposited in the Agency s account as an system entrance fee. Concerns must ensure that their activities under this Act are in compliance with the rules of corporate governance. Card-based system concerns whose headquarters are located in other countries may open representative offices with the permission of the Board and on condition that they shall not establish branches or credit card systems, or issue cards, or act as acquirers in Turkey. Principles and procedures concerning the implementation of this article shall be governed by regulations to be issued by the Agency. License cancellations Article 5: If a concern that is engaged in setting up card-based systems, issuing cards, acting as an acquirer, sharing information, or performing clearances and/or settlements loses any of the qualifications specified in article 4, or is ascertained to have obtained a license on the basis of statements that are not true, or fails to become operational within six months of the date on which its license is obtained, or is inactive for a continuous period of six months during a single year, the Board may cancel its license to perform the activities covered by this Act. Decisions concerning the issuance of licenses and reasoned decisions concerning the cancellation of issued licenses shall be published in Resmi Gazete. Articles of incorporation, acquisitions and assignments of shares Article 6: Matters pertaining to the articles of incorporation of concerns that are engaged in setting up card-based systems, issuing cards, acting as acquirers, sharing information, or performing clearances and/or settlements and to amendment thereof, to the acquisition and

4 assignment of their shares, and to the recognition of indirect shareholding relationships shall be determined by the Board. Evaluation of license applications Article 7: Applications for licenses that are made to the Agency in accordance with the provisions of this Act shall be rejected by the Agency if there exists any direct or indirect relationship of such a nature as to prevent the effective conduct of auditing or if the conditions, qualifications, or competencies required for licensable transactions cannot be achieved or are lost during the license application process. Those concerned will be notified of such rejections along with the justifications for the decision. Section Three The obligations of card issuers Card issuances and their associated obligations Article 8: Card issuers may not dispense cards in any manner or form in the name of any individual unless that individual has requested a card and has signed an agreement for it. Places other than the headquarters or branches of such concerns at which credit card requests may be pooled shall be determined jointly by the Banks Association of Turkey and the Participation Banks Association of Turkey with the approval of the Agency. In situations where a minimum amount is not paid within three months following a paymentdue date, if that amount is not paid within a month following notification by the card issuer to the cardholder or if court-ruled penalties are imposed on account of the use of a bank card or credit card, any credit cards issued to the cardholder by the card issuer concerned shall be cancelled and no new credit cards may be issued until all outstanding obligations are paid. Card issuers are obliged to set up and to ensure the uninterrupted operation of systems so that necessary measures may be taken with respect to the regular and secure use of cards and to notifications, demands, complaints, and objections. As of the moment that a card is issued, card issuers are obliged to keep cardholders adequately informed and, upon request, to provide them with records of transactions that have taken place and to do so within periods of time that are consistent with the nature of the transactions but which shall not exceed thirty days. For international transactions, this period shall be taken as sixty days. Card issuers are obliged to take necessary measures to ensure that codes, PINs, or other means of identification remain confidential if such items of information are necessary for cards to be used and to prevent card numbers from appearing explicitly in customers copies of receipts and credit notices and in correspondence. Card issuers are obliged to take measures to ensure that bank cards and credit cards are surrendered to their primary cardholders and that secondary bank cards and credit cards that are issued in the name of minors are also surrendered to their primary cardholders. Credit card limits

5 Article 9: Card issuers must determine use limits on the basis of an evaluation that they shall make taking into account the disqualification or ineligibility status of those wishing to obtain a credit card, their economic and social standing, the average monthly or yearly income, the limits assigned to such individuals by other credit card issuers, the results of a modeling or scoring system, their customer analysis principles, and information that is to be obtained within the framework of article 29 hereunder. Card issuers may update their card limits within the framework of the provisions of this article. Card issuers may not increase card limits unless their cardholders request them to do so. If cardholders exceed their card limits through their expenditures, no charges may be demanded of them other than contractually allowable interest on the amount by which they have exceeded their limit for the period between the transaction date and the payment-due date. The aggregate limit of all the credit cards allowed by a card issuer for all the credit cards that a private individual holds may not exceed twice the average monthly net income of the holder during the first year nor four times that amount during the second year. In the implementation of this clause, monthly or yearly average income levels shall, with the exception of limits up to and including one thousand Turkish liras, be determined on the basis of income which is declared by the cardholder and which is confirmed by the organizations concerned. At the request of a cardholder, secondary cards may be issued in the name of other individuals on condition that these cards shall be linked to the primary card and shall not exceed the limit of the primary card. The Board is authorized to determine card issuers general and individual risk limits and percentages, including the limitations stipulated in the second paragraph above. Statement of account Article 10: Within the framework of principles and procedures to be determined by the Board, credit card statement of accounts must be issued and must be sent in writing or, at the cardholder s request, electronically or by other effective means. Complaints and objections Article 11: Card issuers must, using the method by which a cardholder has applied to them and in a reasoned manner, respond to complaints and objections concerning the use of cards by cardholders and secondary cardholders within twenty days of the date of such application. Card issuers are obliged to take measures so as to ensure that cardholders and secondary cardholders may conveniently reach their units that deal with complaints and objections. Credit card transactions may be objected to by applying to the card issuer within ten days of the payment-due date. In such applications, credit cardholders must indicate the elements of the statement of account to which they are objecting along with their reasons for doing so. Statements of account that are not objected to in due time become final. The finalization of a statement of account does not void the right to bring suit in accordance with general rules. Wrongful use of cards; insurance

6 Article 12: If a card or the information specified in article 16 hereunder is lost or stolen, cardholders shall be responsible for no more that one hundred and fifty liras of any losses that arise from the illegal use of the card that takes place within a twenty-four hour period prior to their notification of such loss or theft. This limit shall not apply in situations where the illegal use is predicated on the cardholder s gross negligence or malice or where no notification has been made. Card issuers are obliged to insure the one hundred fifty Turkish lira liability specified in the first paragraph above on request and on condition that the insurance premium applicable thereto be paid. Principles and procedures concerning the insuring of cards and the apportioning of liability shall be determined by means of regulations to be issued by the Agency. Corporate governance provisions Article 13: Principles and procedures pertaining to the management and organizational structures of concerns that engage in the activities of issuing cards, sharing information, and making clearances and settlements, to their accounting and reporting systems, and to their corporate governance shall be determined by the Board. Every month, card issuers shall notify the Board as to the interest rates, the annual fees, and all other commission rates that they charge on their credit cards as well as to such other matters as may be required for public disclosure. The content of such disclosable information and documents and the principles and procedures pertaining to their disclosure shall be determined by the Board. Protective provisions Article 14: The Board is authorized to make such regulations as are needed for the purpose of identifying, analyzing, tracking, quantifying, and evaluating the relationships and balances among the assets, claims, equity resources, debts, liabilities and commitments, revenues, and expenses and all other elements that may affect the financial structures of concerns that are licensed pursuant to article 4 of this Act and the risks to which such concerns may be exposed by specifying limits and standard ratios (including capital and liquidity adequacy ratios) and to take any and all measures concerning these. Concerns that are licensed pursuant to article 4 of this Act are obliged to comply with such regulations as may be made; to calculate, achieve, and maintain specified limits and standard ratios; and to take and carry out all measures pertaining to these as demanded by the Board within specified periods of time. Section Four The obligations of cardholders Article 15: The liability arising from the use of a card becomes the responsibility of the cardholder as of the moment at which an agreement is signed and the card comes into his possession or else he learns of the number of a card that otherwise lacks physical existence.

7 A card s signature field must be signed by the cardholder. A cardholder must provide proof of identity if a merchant partner should so demand. A cardholder cannot be held responsible for losses arising from the illegal use of cards in purchases of goods and services by various means of communication or order forms for which a receipt is not issued as per article 20 of this Act. Requirement to notify Article 16: If a card supplied to a cardholder and the use of such a card requires the use of a code, a PIN, or some other means of indicating identity, the cardholder must protect such information in a secure manner and take measures to prevent it from being used by others. If a card is lost or stolen or if a cardholder learns of its involvement in any transaction which he did not authorize, he must notify the card issuer immediately. A cardholder is obliged to notify his card issuer of any changes in his address within fifteen days of the date on which the change takes place. Section Five The obligations of merchant partners and of acquirers Checking and accepting cards Article 17: Merchant partners must accept requests by cardholders to pay for their purchases of goods or services by means of a card or credit card. This obligation remains in effect even during discount campaigns. Merchant partners may not demand that a cardholder pay a commission fee or any other charge whatsoever it may be called on account of his use of a card. If this rule is not obeyed, the merchant partner s agreement shall be terminated by the acquirers and no new agreement may be entered into for a period of one year. In transactions requiring signatures, merchant partners are obliged to check the signatures of those who wish to pay for goods or services by means of a bank card or credit card, to check whether or not the card has been fraudulently altered, and whether or not the card is valid within the framework of information supplied to them by the acquirer. They are obliged to demand, when necessary, presentation of valid identification in order to compare the information contained on the card with the information on the identification and to check and compare information on credit cards with information on receipts. Merchant partners are responsible for any losses that arise from failure to make such checks. Providing information and ensuring system security Article 18: Merchant partners are obliged to place indications that they perform transactions with bank cards and credit cards at the entrance to their business premises and in places where they may easily be seen by cardholders; if their merchant partner agreements terminate for any reason whatsoever they are also obliged to remove such indications. In situations where merchant partners are temporarily unable to perform transactions for any reason whatsoever, they are obliged to warn cardholders of this fact.

8 Merchant partners are obliged to ensure that systems they set up to make it possible to perform transactions by various means of communication or order forms for which a receipt is not issued as per article 20 of this Act are operating securely. Receipts and credit notices Article 19: In situations where a request is made to pay for goods or services or cash is demanded by means of a bank card or credit card and without prejudice to the provisions of article 20, merchant partners must issue a receipt or cash disbursement voucher using electronic or mechanical devices, must retain the originals of such documents for the contractually stipulated period of time, and must give one copy thereof to the cardholder. If this rule is not obeyed, the value of goods or services sold may not be demanded of the acquirer. In situations where goods or services that have been purchased using a card are returned or rejected or where a transaction is cancelled, merchant partners are obliged to issue a credit notice and after giving one copy to the cardholder to retain another copy. Transactions for which signatures are not required Article 20: In situations where it is not possible to issue a receipt or credit notice owing to the nature of the transaction, cards may also be used by means of the holder s communicating the card number in various ways or by means of a code or PIN taking the place of a signature, or by some other method of identification. Acquirers Article 21: Acquirers are obliged to create an infrastructure that will allow card-acceptance related approvals to be received from card issuers. Acquirers may determine transaction limits for the places of business that they enter into agreements with. Acquirers must pay merchant partners with whom they have entered into such agreements amounts for cardholder transactions in accordance with contractually stipulated provisions. The Board is authorized to impose limits on the scope and transaction types of merchant partners with whom agreements are to be entered into. Transaction limits Article 22: If merchant partners are obliged to obtain a card issuer s acceptance in situations where the amount of an expenditure on a single credit card exceeds a specified limit, they must obtain the authorization for the full amount of the expenditure. Multiple receipts may not be issued for a single payment with the same card. If this rule is not obeyed, the value of goods or services sold may not be demanded of the acquirer. Information confidentiality Article 23: Without the written consent of a cardholder, merchant partners may not divulge any information that they become cognizant of about a card or cardholder as a result of card use except to such individuals, agencies, or organizations as may be empowered by law nor

9 may they retain or copy such information. Merchant partners may not share card information with any concern other than the acquirer nor may they sell it, buy it, or exchange it. Acquirers are obliged to ensure that this rule is complied with. Card issuers are obliged to keep personal information that they acquire confidential, to refrain from using it for any purposes other than to market their own services, and to take necessary measures to prevent those outside their organizations from gaining access to such information. Section Six Form of contract and general terms Contractual terms Article 24: Relations between card issuers and cardholders shall be governed by means of a contract that shall be prepared within the framework of this Act and other relevant laws, regulations, and administrative provisions and written in dark black letters not less than twelve points in size. One copy of the contract shall be given to the cardholder and, if one exists, to his co-signer. Cardholders must be given detailed information about the terms of their contracts and the use of their cards. The Board shall determine the minimum requirements that must exist in terms of the form and content of contracts that card issuers enter into with cardholders. The contractually stipulated minimum amount may not be less than twenty percent of current outstanding debt. Failure to pay at least the minimum amount shown in a statement of account by the payment-due date shall not impose any liability upon a cardholder other than the contractually stipulated default interest due on the unpaid amount. No charges under any rubric such as interest, commission, or expense that are not contractually stipulated may be demanded of a cardholder in any manner or form nor may they be deducted from the cardholder s account. Agreements may not contain any provisions which are detrimental to a cardholder s rights or which unilaterally benefit the card issuer in unjust ways. Agreements must indicate that co-signers will not be deemed to be in default unless they have been notified as to what is owed by the cardholder. In order for a co-signer to become responsible for additional conditions pertaining to any changes in contractual terms that would increase his responsibility or raising card use limits, the co-signer s written consent must be obtained. Suretyship in credit card use is subject to the provisions of ordinary guarantees as specified in the Code of Obligations. No demand may be made of a co-signer for the fulfillment of obligations unless every possible effort has been made to have recourse to the principal debtor and to collect them from him. Changes in agreements Article 25: Cardholders shall be notified of any changes that are to be made in their agreements. Such changes shall take effect as of the payment-due date of the billing period in which notification thereof is made. If a card continues to be used after the payment-due date of the billing period in which such notification is made, that shall be taken as meaning that the

10 changes in contractual terms have been accepted. If interest rates are to be raised however, the cardholder must be notified thirty days in advance in order for such changes to take effect. If a cardholder pays everything that he owes within sixty days of the date on which he is notified of an increase in interest rates and ceases to use his credit card, he shall not be affected by the interest rate hike. Cardholders have the right to have their cards cancelled and their agreements terminated on demand. Calculating interest Article 26: Stipulations to the effect that interest may be charged retroactively, on the total outstanding debt or account balance of a billing cycle, effective as of any date before the billing date on which the statement of account for that cycle is issued are null and void. Transaction dates may be taken as the basis for obligations pertaining to the use of cash. Transactions that shall be treated as use of cash shall be determined by the Board. If less than all of the current debt is paid, interest shall be charged on the outstanding balance. Contractual interest shall be charged on the outstanding balance if at least the minimum amount is paid; default interest shall be charged if less than the minimum amount is paid. Compound-rate interest shall not be charged on debts arising from any use of cards, including but not limited to cases of default. The Central Bank of the Republic of Turkey is authorized to determine maximum contractual and default interest rates and shall announce such rates once every three months. The time between the billing date and the payment-due date may not be less than ten days. From the standpoint of participation banks, the term interest as used in the implementation of this Act shall be taken as dividend and the term default interest as default penalty. Subparagraph (f) of the second paragraph of article 10 of the Consumer Protection Act (Statute 4077) shall not be applicable to credit cards. Section Seven Audits and precautionary measures Audits Article 27: The activities which concerns that are licensed pursuant to article 4 of this Act conduct within the framework of the provisions of this Act shall be audited and supervised by the Agency. These concerns must themselves give priority to setting up their own internal control, risk management, and internal audit systems and their own accounting and financial reporting unit and to making all of the records, information, documents, structures, and systems especially information and documents pertinent to their financial statements amenable to and ready for auditing. Individuals and organizations who are covered by this Act are obliged to submit to the Agency any and all information and documents pertaining to the implementation of this Act,

11 whether or not they are confidential, within the framework of principles and procedures to be determined by the Board. Principles and procedures pertaining to auditing and supervision shall be determined by means of regulations to be issued by the Agency. Precautionary measures Article 28: The Board is empowered with the consenting vote of at least five of its members, to revoke the operating license of a concern which is licensed pursuant to article 4 of this Act but which fails to take measures concerning issues that are ascertained within the framework of article 14 as a result of any audit. Section Eight Cooperation among organizations and agencies Data sharing; clearances and settlements Article 29: Information and document sharing that takes place for the purposes of monitoring, assessing, and managing cardholders risk standings and of providing customer services and the clearing and settling of payables and receivables arising from card use shall be conducted by card issuers themselves within the framework of written agreements that they enter into with each other or through companies that must be set up by at least five card issuers. Relevant private individuals and corporate entities may, against payment, take advantage of data-sharing systems that are set up. The provisions of article 44 of this Act shall apply in any disputes arising over the exercise of this right or over information and documents. Information and document sharing that takes place under this article shall not be subject to the rule of the second paragraph of article 31. Companies that are set up pursuant to the first paragraph above are obliged to provide all information and documents demanded by the Agency in accordance with specified principles and procedures. The Agency is authorized to make use of any information and documents that are received in its supervisory and auditing system and in any legal action that may be taken. The operational principles and procedures of these companies, the requirements for membership, and matters pertaining to supervision and audit shall be subject to the regulation of the Board having obtained the opinion of the Central Bank of the Republic of Turkey. Should the Board deem it to be necessary, the authority to supervise and audit these companies may be exercised jointly by the Agency and by the Central Bank of the Republic of Turkey. Inter-agency cooperation Article 30: In matters concerned with the implementation of this Act and with the conduct of credit card policy, the Agency, the Ministry of Finance, the Ministry of Industry and Commerce, the Treasury Undersecretariat, the Competition Authority, the Central Bank of the Republic of Turkey, and other agencies to be determined by the Board shall exchange opinions and information with one another.

12 The Agency and the Central Bank of the Republic of Turkey shall, within the framework of the principles of confidentiality, share data base information on which they are in mutual agreement in order to fulfill their duties as set forth in this Act. Principles and procedures pertaining to information sharing and to cooperation on other matters shall be determined by the Board having obtained the opinions of the those concerned. Section Nine Legal obligations Maintaining confidentiality Article 31: Members of the Board and personnel of the Agency may not divulge confidential information about concerns, cardholders, or co-signers that they learn during the conduct of their duties to anyone who is not explicitly authorized by law to receive such information; neither may they use such information for their own benefit. Neither those who set up card-based systems, card issuers, acquirers, or the concerns or the merchant partners specified in article 29 nor their shareholders, their directors, or their employees, nor their agents or their officers may divulge any confidential information that they learn on account of their positions or duties to any body that is not explicitly authorized by law to receive such information. This rule shall also apply to the concerns from which card issuers obtain support services and to the employees of such concerns. Burden of proof Article 32: In disputes that arise over transactions with merchant partners which are performed by telephone, electronically, order form, or other means of communication and in which only the card number is supplied, the burden of proof shall be upon the merchant partner. In any dispute that may arise between a card issuer and a cardholder, it shall be incumbent upon the card issuer to prove that transactions were recorded and booked to account in an error-free manner and that no technical shortcomings or malfunctions were involved. Telephone transmissions that are made subject to this Act must be made to call centers at which conversations are recorded or by means of recording devices provided in the places concerned. Audio recordings related to telephone transmissions that are made to call centers that card issuers have announced and publicly disclosed shall be retained for a period of one year commencing on the transmission date. Those that are subject to dispute however must be retained until resolution of the dispute and without regard for this limitation. Copies made from microfilms or microfiches and documents containing information taken from electronic or magnetic media shall be deemed to be documents as specified in the first paragraph of article 68 of the Enforcement and Bankruptcy Code (Statute 2004) without any need for originals, provided that such copies and documents are consistent with each other. Due diligence

13 Article 33: Concerns that set up card-based systems, card issuers, and acquirers as well as merchant partners are obliged to exercise all due diligence and care in fulfilling the obligations imposed upon them by this Act and relevant regulations. Protection of professional activities Article 34: No private individual or corporate entity other than those authorized by this Act to set up card-based systems, to issue cards, or to act as acquirers may set up card-based systems, issue cards, or act as acquirers as either a primary or subsidiary professional activity nor may they employ any words or expressions in their trade names, or in any of their documents, or in their advertisements or announcements which would create the impression that they were engaged in such businesses. Section Ten Administrative and judicial sanctions Administrative fines Article 35: By rulings of the Board in which the justifications are given, administrative fines shall be imposed on organizations covered by this Act in the ranges of: a) two thousand Turkish liras to ten thousand Turkish liras for infractions involving the first, second, or third paragraphs of article 8 of this Act; b) two thousand Turkish liras to ten thousand Turkish liras for infractions involving the first paragraph of article 9 of this Act; one percent of the amount of the infraction for infractions involving the second paragraph thereof except that the fine shall not be less than five thousand Turkish liras; c) two thousand Turkish liras to ten thousand Turkish liras for infractions involving the first paragraphs of either article 10 or article 11 of this Act; d) ten thousand Turkish liras to fifty thousand Turkish liras for infractions involving the provisions of article 14 of this Act; e) two thousand Turkish liras to ten thousand Turkish liras for infractions involving the second paragraph of article 18 of this Act; f) two thousand Turkish liras to ten thousand Turkish liras for infractions involving either article 24 or article 25 of this Act; g) ten thousand Turkish liras to fifty thousand Turkish liras for infractions involving the first paragraph of article 27 of this Act; h) two thousand Turkish liras to ten thousand Turkish liras or up to one percent of the amount constituting the infraction for any failure to comply with the Board s decisions, regulations, communiques, or other rulings that are based on relevant articles of this Act.

14 The fines specified in this Act shall be increased at the beginning of every year in accordance with the provisions of the Misdemeanors Act (Statute 5326). Issuance of fraudulent documents Article 36: Those who issue false receipts, cash disbursement vouchers, or credit notices and those who secure benefit for themselves or for anyone else by fraudulently altering such documents in any way whatsoever shall be punished by imprisonment of two to five years and by a court-imposed fine corresponding to five thousand days. False statements; falsifications in contracts and their attachments Article 37: Cardholders who, having falsely stated that a bank card or credit card has been lost or stolen, make use of such a card or allows someone else to use it and those who knowingly use such cards shall be punished by imprisonment of one to three years and by a courtimposed fine corresponding to two thousand days. Those who engage in the falsification of credit card or merchant partner agreements or in the attachments thereto and those who adduce false documents in order to sign such agreements shall be punished by imprisonment of one to three years. Unauthorized card issuance Article 38: Private individuals and the officers of corporate entities who set up card-based systems, or issue cards, or act as acquirers without obtaining the licenses specified in article 4 of this Act and those who employ any words or expressions in their trade names, or in any of their documents, or in their advertisements or announcements which create the impression that they are engaged in such businesses shall be punished by imprisonment of one to three years and by a court-imposed fine corresponding to one thousand days. In the event of any violations of the first paragraph above, the business activities and advertising shall be temporarily halted by a magistrate upon action taken by a public prosecutor at the request of the Agency or, if a suit has been initiated, by the court hearing the suit and the advertisements shall be confiscated. These measures shall remain in force until the ruling ordering them is abated. Such rulings may be appealed. Data security violations Article 39: The officers of concerns, of merchant partners, and of acquirers who are actively involved in the management of business and persons performing the transactions who deliberately contravene the provisions of article 8 paragraph 5 and of article 23 of this Act shall be punished by imprisonment of one to three years and by a court-imposed fine corresponding to one thousand days. The officers of card issuers, of merchant partners, and of acquirers who are actively involved in the management of business and their implicated employees who cause codes, card numbers, PINs, or other means of identification which are essential to card use and which should remain confidential to become disclosed whether because of carelessness, or negligence, or professional incompetence, or disobedience to orders or rules shall be punished by a court-imposed fine corresponding to one thousand days.

15 Those who violate article 31 of this Act shall be subject to imprisonment of one to three years and by a court-imposed fine corresponding to one thousand days. Criminal liabilities of merchant partners Article 40: The officers of merchant partners who are actively involved in the management of business and their implicated employees who violate the requirement to remove markings indicating that transactions are performed by means of bank cards and credit cards as per article 17 paragraph 1 and article 18 of this Act or who violate article 19 shall be punished by a court-imposed fine corresponding to one thousand days. Failure to provide information and documents demanded during audits Article 41: Those who do not provide information or documents demanded pursuant to article 27 paragraph 2 of this Act and those who provide information or documents that are false shall be punished by imprisonment of three months to one year and by a court-imposed fine corresponding to one thousand five hundred days. Prosecutorial procedures Article 42: The conduct of investigations and prosecutions concerning the offenses set forth in articles 38, 39, and 41 of this Act shall be contingent upon a written application made by the Agency to a public prosecutor. This application is a prerequisite for prosecution. In criminal cases that are initiated as a result of investigations conducted in accordance with this paragraph, the Agency becomes an intervenor as of the date on which an application is made when such applications are made. If public prosecutors decide that there are no grounds for prosecution as a result of investigations initiated in accordance with the provisions of the first paragraph above, the Agency shall be notified of this decision. Upon their notification, the Agency is authorized to object to such decisions in accordance with the Criminal Procedures Code (Statute 5271). If a criminal case is initiated, a copy of the indictment shall be sent to the Agency. Any interested party has the right to apply to a public prosecutor on account of any offense specified in article 39 of this Act. Section Eleven Miscellaneous provisions Corporate credit cards Article 43: The provisions of article 8 paragraph 2 and of articles 9, 12, 24, 25, 26, and 44 of this Act shall not apply to corporate credit cards that are issued to having the status of merchant. Competent courts and authorities

16 Article 44: In the event of any dispute over the implementation of this Act, the provisions of articles 22 and 23 of the Consumer Protection Act (Statute 4077) shall apply if the cardholder is a consumer. In suits initiated by card issuers against cardholders, the provisions of the Civil Procedures Code (Statute 1086) pertaining to duties and authorities shall apply. Notifications Article 45: Without prejudice to the provisions of the Notifications Act (Statute 7201), notices that are to be served on cardholders and their co-signers in accordance with this Act shall be sent to the address appearing in an agreement or application form or, if a cardholder has reported this address as having changed, to his most recently reported address. Dues Article 46: Concerns other than banks that are licensed to conduct activities pursuant to article 4 of this Act shall pay dues to the Agency at a rate which is to be determined by the Board but which shall not exceed three parts in ten thousand of their previous year s year-end balance sheet total. Dues that are not paid within specified periods of time shall be collected in accordance with Statute 6183 concerning Procedures for the Collection of Public Claims. Dues that such concerns pay to the Agency shall be treated as expenditures when determining their corporation tax assessment base. Monetary amounts Article 47: With the exception of those provisions concerning monetary fines, each of the amounts of money and the limits in this Act may be increased once a year by a decision of the Board, except that such increases shall not exceed the amounts made necessary by the rise in the consumer price index announced by the Turkish Statistical Institute. Regulations Article 48: The regulations that are to be issued in accordance with this Act shall be prepared and put into effect by the Agency within one year s time. Transition article 1: Concerns that fall within the scope of the provisions of this Act must bring themselves into compliance with the provisions of this Act within one year s time. Transition article 2: Concerns other than banks that were already engaging in the activities specified in article 4 on the date that this Act goes into force must apply to the Agency, in order to obtain the licenses that they need, within three months of the date on which the regulations specified in the same article are published. Transition article 3: Concerns that issue cards pursuant to this Act must bring their practices related to interest calculations into compliance with the provisions of this Act within three months time and their other practices into such compliance within one year s time.

17 However the minimum amount in article 24 paragraph 3 shall be applied as ten percent for six months beginning on the date this Act goes into effect. Transition article 4: Those with unpaid credit card debts who, as of the date this Act went into force, had been served notice to pay a current debt, or about whom legal proceedings had been initiated, or had gone into default on or before 31 January 2006 shall have the right to pay off what they owe in eighteen equal installments along with interest calculated at the rate of 18% a year until the entire final amount reported to them (together with prosecution and court costs and fees and attorney s fee if the debt has become the subject of legal proceedings) has been paid off provided that they shall apply to the appropriate credit card issuer or its attorney in writing within sixty days time indicating their current address of record and declaring that they wish to pay off their debt in installments and on condition that they shall sign a payment plan that is drawn up and shall pay the first installment immediately. The principal of the debt owed on the date of default shall be the total amount specified as current debt and sent to the cardholder on that date by the card issuer. On condition that the respondent to the credit card debt shall have applied to the creditor in accordance with the first paragraph of this article and is paying installments in line with the payment plan that has been drawn up, enforcement proceedings shall be suspended, with any that have already taken place being held in reserve, and the periods of time specified in the Enforcement and Bankruptcy Code shall be inoperative. Respondents to credit card debt may object to their payment plans only on condition that they shall have made payments and continue to make payments in accordance with such plans. In the case of debts that are restructured pursuant to this transition article, any objections that the respondent to debt may have made prior to the restructuring shall become void. Debt enforcement proceedings shall end when the last installment has been paid on time in accordance with the payment plan. If any installment goes unpaid when due, the rights arising under this article become void and existing debt enforcement proceedings shall continue subject to the rate of default interest specified in article 26 of this Act. This transition article does not give anyone the right to demand the recovery of any payments that may have been made before this Act went into force. Entry into force Article 49: This Act goes into force on the date of its publication. Enforcement Article 50: The Council of Ministers shall enforce the provisions of this Act.