The relationship between customer and bank

Turkey has comprehensive laws on the protection of consumers’ rights. Two years ago I wrote an article about these rights in the context of purchasing a property. This time I want to address Consumer Rights in the context of banking services. Many of you will already use banking services in Turkey and most likely a significant proportion of you will also use specific banking services, such as a credit card, personal loan or home purchase using a mortgage. This article relates to personal loans and loans taken out in connection with the purchase of property.

When making loans the bank or financial institution concerned must follow strict rules laid down in the laws and regulations on consumer protection. The financial institution must ensure that a written agreement is drawn up with the consumer and that the consumer is provided with an original copy. The agreement must cover a range of points, including the amount of the loan, the calculation of interest, the total amount payable, the dates that repayment is due, any deposits, the amount of interest payable upon default, terms and conditions that apply to earlier payment possibilities, etc.

Independent on what was stipulated; a financial institution cannot start making automatic collections unless the customer has failed to make two consecutive repayments. The financial institution must also give a non-paying customer one week’s notice in writing (in case of personal loans) or one month’s notice in writing (in the case of a mortgage) of their obligation to make repayments.

The loan agreement with the financial institution may also be signed by a third party acting as guarantor, for example your wife or close relative. The financial institution is not permitted to make automatic collections from this person, until the customer’s personal deposit has been used up.

Despite the law talking about deposits, a financial institution cannot demand a senet’ from the customer. If this does happen, you can claim a refund of the senet. Any loss arising from the collection of a ‘senet’ by a third party, to whom the senet has been surrendered by the financial institution, can be reclaimed from the financial institution. I frequently encounter cases of financial institutions charging the customer all sorts of costs under the guise of administrative charges, expert costs, etc. Unless the financial institution can justify such costs with a receipt or invoice, these kind of ‘major’ costs cannot be passed on to the customer. For example, in securing a mortgage for a holiday home, a bank charges 3000 TL in expert costs (expert costs set by the bank), while the actual cost of the expert come to no more than 600 TL. This is not legitimate. The financial institution can charge the customer up to 600 TL and no more. If, regardless of this, the bank charges a greater amount, the customer can reclaim the excess, even if he agreed to the greater amount at the outset. Lawsuits taken out in respect of consumer rights are usually much more speedy and cost-effective, and provide more security to the claimant in the capacity of the consumer. 

Turkish Trade Law most important changes on 1 July 2012

In Turkey, on July 1st 2012, a new Turkish Trade Law will be in place.

This law implements the following changes in regulation:

• Turkish Limited Companies can be established with only one partner.

Board Meetings

• General board meetings can be held online for the benefit of foreign shareholders.
• Minority shareholders rights will be strongly protected.
• Minority shareholders can call for the general board to have a meeting.
• Board members are not obligated to be shareholders of their companies.
• Board members have tenure for a maximum of three years. After three, years a re-election of board members must occur.
• Board members can insure themselves for their business practices.

Financial part

• Companies can buy their own shares.
• Neither board members nor shareholders may borrow money from their own company.
• Board members cannot compete with their own company’s business outside of their own respective company.
• If 25% of company shareholders are present, a general board meeting can take place.
• On January 1st, 2013, book keeping records must be done in the International Financial Reporting standard (IFRS)

Auditing

• Auditors now have more responsibilities.
• Shareholders can request special auditing for any subject.
• On a negative Auditor report, the board must gather the general board for a meeting and  board members must resign.
• Merger acquisition codes have been clarified, and merger acquisitions are now easier.

Other

• Companies must create internet web pages to circulate their knowledge.
• Dividend advances can now be offered.

Tax on Rental Income 2012 has been changed!

Today the Ministery of Finance will explain the new system of tax filing. According to the minister the new system of tax filing will completely replace the old system by which in the new system the lessor will receive a personal letter in which the tax is already been calculated. When you don’t have any objections about the amount the tax calculation will be final.

Until this year the public was requested to do a tax filing on its own. Each year before the 26th of March you personally had to fill in a form and send it to the local tax office.

ABC CONSULTANCY is a firm who the last couple of years helped you with your tax filing. ABC Consultancy confirmes that the new system will have a couple of defaults or unclearnesses, so also  the firm is willing to help and clear out the possible problems with the new system of tax filing.

What has been changed?

Yesterday the minister published the new system. So the difficult calculations that you each year had to fill in with help from advisors do no longer exist.

Until this year the public was requested to do a tax filing on its own. The Ministery decided to change this system and as a result from now on the Ministery itself will send a personal letter in which he has already calculated the amount of tax you have to pay. Already 1.200.000 letters has been send. The amount is based on information received from insurance companies, cadastre  and banks. The only thing you now have to do is to check the amount in the letter. If you accept is you can pay it. In case you do not agree with the amount or the information in this letter you can raise objections about it in which the burden of proof lays on you. Do you however give the tax office incorrect information, you risk a financial penalty of the tax payment with interest and an extra fine for the last 5 years.