AN ANGRY public backlash has prompted banks in Singapore to stop the aggressive practice of offering unsolicited credit lines to credit card applicants.

Customers have been incensed at being charged fees - $55 to $80 a year - for credit lines they never asked for.

Now, the main body representing banks in Singapore says banks must revert to the standard practice of getting explicit consent from credit card applicants before giving them personal credit lines. This will start from the middle of next month, said the Association of Banks in Singapore (ABS).

This ABS move to impose an industry standard follows a report in The Straits Times last week that this tactic had raised the ire of some customers.

It turned out that some banks were using a relatively new sales tactic of offering credit facilities bundled with credit cards to customers.

They had changed the format of application forms to require customers to specifically indicate that they did not want a credit line.

United Overseas Bank, OCBC Bank, Standard Chartered Bank and Citibank use this 'opt-out' approach.

Teacher Chan Xiuling, 29, was among the disgruntled customers who were unaware that they had been given a credit line - until they were hit by penalty charges for not paying the credit line fees on time.

ST understands that the industry regulator, the Monetary Authority of Singapore, raised the issue with some banks last week.

Customers were also confused because the banks differed in the way they offered credit lines with credit cards.

DBS Bank and ABN Amro, for instance, stuck to the 'opt-in' format. DBS said it has to strike a balance between giving customers the convenience of having a credit line and giving them the option of deciding for themselves.

But soon banks will standardise their practice so that all of them use the 'opt-in' approach, said ABS.

ABS director Ong-Ang Ai Boon noted that 'although many customers have no issue with the 'opt-out' approach', its member banks 'took customers' feedback seriously' and had therefore agreed to adopt the standard practice.

'We would also like to advise customers to read the credit card applications carefully before signing off on the forms,' she added.

Mr Y.C.Chen, 49, an engineer, supported the change imposed by ABS.

He said: 'It would be much less confusing for customers, now that all the banks have standardised their practice, rather than having to double-check their application forms to ensure they weren't signed up for a credit line'.

Ms Chan said: 'The standardised opt-in approach should have been done earlier.'

The Consumers Association of Singapore (Case), which had slammed the opt-out practice as being 'questionable', welcomed the move.

'This move to standardise banks' approach to an 'opt-in' one gives customers the right to choose whether to accept a financial product. It is only fair since they eventually have to pay for the credit line,' said Case executive director Seah Seng Choon.

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