General Assembly of the Supreme Court
Case No.: 2017/2850
Decision No.: 2019/154
“Judgment Text”
COURT: Consumer Court
As a result of the “compensation” lawsuit filed between the parties pursuant to the decision of the Istanbul 3rd Consumer Court dated June 20, 2013, Case No. 2009/1019, Decision No. 2013/688, the claim for material compensation was partially granted and the claim for moral compensation was dismissed, The decision of the 13th Civil Chamber of the Court of Cassation dated June 12, 2014, Case No. 2013/32840 E., Decision No. 2014/18798 K., regarding the attorney of Murat Doğan;
“…The plaintiff claims that the credit card he received from the defendant bank was stolen while traveling on a minibus on March 14, 2005, and that he notified the defendant bank by phone at 2:43 PM, followed by a written notice, stating that a purchase of 4,000 TL was made with the credit card at Doğan Kuruyemiş, a business operated by the defendant… a purchase of 4,000 TL was made using the credit card; that the defendant bank refused to cover this amount on the grounds that it was made prior to the notification;
that despite the credit card being stolen and there being no fault in its use, the bank assumed liability for only 750 TL; that the plaintiff was forced to pay 3,275 TL to the defendant bank; Additionally, the plaintiff alleged that the defendant was prosecuted in criminal court for this act and convicted of fraud, and that the defendants bear joint and several liability; the court ruled that the defendants must jointly and severally pay a total of 3,420.30 TL and 5,000 TL.
>The defendant bank argued that the transaction in question occurred at 2:39 PM, four minutes before the plaintiff’s notification, and that pursuant to Article 19 of the contract, they were not liable for expenses incurred before the notification reached the bank, and thus requested the dismissal of the case. The defendants
… and Murat Doğan, however, argued that this was a routine transaction, that they had no fault, and that the plaintiff was responsible for failing to safeguard his credit card with due care, and requested that the case be dismissed.
>The court dismissed the case against the defendant bank, partially granted the case against the other defendants … and Murat Doğan, and ordered the defendants to jointly and severally pay the plaintiff 1,645.30 TL, including discount interest from the date of the lawsuit; the plaintiff and the court appealed this decision. Defendants … and Murat Doğan.
1- Since there are no errors in the provisions of the case file, the evidence upon which the decision is based, or the legally required grounds—particularly regarding the discretion of those of sound mind—all other objections by the defendants … and Murat Doğan, except those covered by the following subparagraph, must be dismissed.
2- While the plaintiff claims not to be liable for expenses arising from the unauthorized use of the credit card by third parties, the defendants argued that the necessary care was not exercised in the safekeeping and protection of the credit card information and PIN, that the bank is not liable for expenses incurred prior to the theft report, and that the plaintiff should not be held liable for these expenses either.
It has been established in the case file that the Akbank Axess credit card owned by the plaintiff was stolen on March 14, 2005, that the plaintiff reported the theft to the bank at 14:43, and that the transaction in question, amounting to 4,000 TL, was carried out at 14:39. To resolve the dispute between the parties, the relevant provisions of Law No. 5464 on “Bank Cards and Credit Cards” must be examined.
Article 15, titled “Obligations of Cardholders,” states: “Liability arising from the use of the card belongs to the cardholder from the moment the contract is signed and the card is in the cardholder’s possession or the card number is learned, even if the card has no physical presence.”
Article 16, titled “Duty to Notify,” further states: “If the use of the card requires a PIN, password, or other identification method, the cardholder is obligated to securely protect this information and take necessary precautions to prevent its use by others. In the event of loss, theft, or any transaction occurring without the cardholder’s consent, the cardholder must immediately notify the issuing institution.”
Article 12, titled “Unauthorized Use of the Card and Insurance,” states: “In the event of the loss or theft of the card or the information specified in Article 16, the cardholder is liable for damages resulting from unauthorized use occurring up to twenty-four hours prior to notification, limited to one hundred fifty Turkish Liras. This limit does not apply if the unauthorized use results from the cardholder’s gross negligence or intent, or if no notification is provided.”
Article 19 of the credit card agreement between the parties states: “In the event of the loss, theft, or damage rendering the credit card unusable, the member or supplementary cardholder is obligated to immediately notify the bank by telephone and subsequently confirm this in writing. Compliance with this notification requirement is mandatory.”
“All liability arising from transactions made using a credit card, PIN, or credit card number rests with the supplementary cardholder. After the Bank has suspended the credit card for use both domestically and internationally following a reasonable period, and upon notification to the Bank, the member shall be liable for any transactions conducted with the credit card by third parties, and the supplementary cardholder shall not be held liable.”
This provision is in effect. As can be seen, the credit cardholder is obligated to protect and safeguard the credit card entrusted to them under the aforementioned law, as well as the information related to its use, from the moment they sign the contract with the bank and receive the card.
However, pursuant to Law No. 5464, in the event of the loss or theft of the credit card or such information, compensation for damages arising from unlawful use within the twenty-four hours preceding notification to the bank is limited to one hundred fifty Turkish Liras, provided there is no gross negligence or intent. In such cases, Article 12 of the Law must be evaluated according to the specific circumstances of each case. In the present case, it is understood that the plaintiff fulfilled their obligation to notify the defendant bank of the 4,000 TL purchase by signing the receipt four minutes before the notification, and that the expert report determined the signature on the receipt was not the plaintiff’s.
It cannot be claimed that this unauthorized transaction resulted from the plaintiff’s gross negligence or intent. This is because the plaintiff’s card was stolen while traveling on a minibus, and there is no allegation or evidence within the case file suggesting any negligence on the plaintiff’s part that would have facilitated the theft of the card. Under the normal course of life, it is not feasible for the plaintiff to constantly open and close their wallet to check their credit card while traveling on a minibus.
Furthermore, the fact that the transaction was made using the plaintiff’s signature, PIN, etc., on the receipt demonstrates that their information was securely protected. Therefore, it must be accepted that the plaintiff is liable for damages arising from this unauthorized use occurring within the twenty-four hours prior to notification to the Bank, in accordance with Article 12 of Law No. 5464, limited to one hundred fifty Turkish Liras. For the reasons explained above, a ½ fault reduction cannot be applied against the plaintiff with respect to the other defendants.
The court decided to dismiss the case in writing on the grounds that the plaintiff was seriously at fault for allowing the password to be accessed quickly, failing to select a secure password or store it safely, failing to check whether the card was in the wallet, and allowing the card to be stolen due to negligence. Furthermore, applying a ½ reduction in liability for the other defendants is contrary to procedure and law and constitutes grounds for annulment…”
At the conclusion of the retrial, the court overturned the previous decision.
APPLICANTS: 1- Plaintiff’s Attorney
2- Attorney for the Defendants … and Murat Doğan
DECISION OF THE GENERAL COUNCIL OF JUSTICE
After review by the General Assembly of the Court of Cassation, it was determined that the appeal against the decision was filed in a timely manner, the documents in the file were reviewed, and the merits of the case were considered:
The case concerns a claim for compensation.
The plaintiff’s attorney stated that the plaintiff’s Akbank Axess credit card was stolen on March 14, 2005, between 2:00 p.m. and 2:30 p.m., while the plaintiff was traveling by minibus on the Ankara Asfaltı Bostancı-Maltepe road, and that the plaintiff reported the theft to the bank at 2:43 p.m. as soon as the theft was discovered.
It was stated that during this period, a purchase of 4,000 TL was made at İçerenköy Doğan Kuruyemiş, a business owned by the defendant and operated by the other defendant; however, the bank covered only 750 TL of this amount, and the remaining amount had to be paid by the client. In its decision dated November 24, 2005, the Kadıköy 2nd High Criminal Court found that by swiping the credit card that had been unlawfully taken from the POS device at the business premises and by forging documents, and by acting as if the bank had no intention of making unauthorized charges despite knowing the card was stolen, the plaintiff was convicted of fraud.
The plaintiff refuses to pay compensation to those who committed the crime as if they had no prior theft record. Claiming that the fault lies with him and that he is liable for failing to comply with the notice of default, the plaintiff is seeking a total of 3,420.30 TL in compensatory damages, 5,000 TL in punitive damages, 40% of the notice of default amount, and 145.30 TL in warning fees from the defendants jointly and severally.
The defendant bank’s attorney argues that the plaintiff is at fault for failing to exercise the necessary care and diligence in protecting his credit card, that the bank’s liability arose only after the fraudulent transaction was reported to him, and that the transaction in question was made four minutes prior to the time the fraudulent transaction was reported (14:43), and therefore, as a gesture of good faith, the bank bears no liability; the cardholder must cover 750 TL of the loss, which is based on the merchant agreement between the business in question and the bank.
The attorney requesting the dismissal of the case argued that the POS device did not belong to another bank, that under interbank rules, there is no situation where a transaction made with an open card—authorized through the appropriate channels—would result in a block or non-payment to the relevant bank, and that the conditions for moral damages were not met.
The defendant … and his attorney … argued that, although the criminal case has not yet been resolved and it has not even been proven whether the client was present in the store on the date of the incident, he was nevertheless convicted of the charges of slander and defamation; It was alleged that the store where the purchase was made is a monopoly business, and therefore, especially on extraordinary days, during celebrations, or when alcohol is consumed, this establishment is constantly used.
Large-scale purchases are made at the request of restaurants; such purchases are routine for a monopoly retailer; identity checks are always conducted at this establishment, but these checks are not always sufficient against malicious individuals; similar malfunctions can occur at nearly every business where POS machines are present. The plaintiff argued that he was at fault for failing to fulfill his duty to protect the card properly due to its theft, that the claim for 40% compensation had no legal basis in this case, and that the conditions for moral damages were not met.
The court The court ruled that the bank could only be held liable for transactions made after the card was reported stolen, that the cardholder was grossly negligent for failing to fulfill the duty to protect the card as required, and that, for this reason, the plaintiff could not benefit from the provisions of Article 12 of the Bank Cards and Credit Cards Law.
Regarding the assessment of the other defendants:
The defendant argued that the liability of the member merchants—particularly for failing to conduct identity checks and thereby enabling purchases with a stolen credit card—should be acknowledged; however, the plaintiff also allowed the card to be stolen due to negligence while it was under their supervision and bore fault in the incident, so half of the damages should be attributed to the defendants. With the partial acceptance of the claim for monetary compensation against the individuals, it was decided to collect 1,645.30 TL from these defendants, while the claims for moral damages and additional compensation were rejected due to the failure to meet the necessary conditions.
Upon the objection filed by the plaintiff’s attorney and the attorney for the defendants … and Murat Doğan, the Special Chamber overturned the judgment based on the grounds stated in the heading of the decision above.
The local court filed an appeal against the reversal decision, reiterating the grounds of the original decision.
The appeal decision was challenged by the plaintiff’s attorney, the defendants …, and Murat Doğan’s attorney.
I- All objections raised by the defendants against the local court’s decision finding the defendants and Murat Doğan at fault and liable in the case, as well as the objections raised by the plaintiff’s attorney against the award of moral damages and 40% punitive damages, which were rejected by the court. Thus, the portions of the first judgment specified above have become final for the parties, and these matters are no longer in dispute between the local court and the Special Chamber. Therefore,
due to the absence of a legal interest, all objections raised by the defendants’ and Murat Doğan’s attorney, as well as all objections raised by the plaintiff’s attorney—with the exception of the paragraph below—must be dismissed.
II- The plaintiff’s attorney mentioned above (I). Review of the objections, excluding those indicated in the paragraph:
The dispute brought before the General Assembly of the Supreme Court via objection;
In the event of the theft or loss of the plaintiff’s credit card, the local court dismissed the defendant bank’s claim for monetary compensation based on the conclusion regarding whether the defendant bank bears any liability beyond the 750 TL it had committed to pay, and whether the plaintiff’s liability, along with that of the other defendant, Murat Doğan, should be accepted. Regarding the other defendants, an assessment was made as to whether it would be appropriate to reduce the compensation by half, given that the plaintiff was also at fault.
In resolving the dispute, it would be beneficial to examine the allocation of liability for damages arising from the unlawful use of the credit card by a third party separately for each party to the case.
In our country, the number of credit card users and their expenditures have been increasing since 1987. Despite this, the first legal regulation regarding credit cards was established in 2003 through Article 10/A, added to the Consumer Protection Law No. 4077, and Law No. 4822. However, this regulation aims solely to protect consumers regarding credit cards and consumer loans, meaning its scope is limited.
This is a specific regulation and does not contain any provisions regarding the point of resistance.
The establishment of a comprehensive legal framework governing bank and credit cards, card systems, the parties to the card relationship, the rights, obligations, and liabilities of the parties, and the control of the system was only achieved with the “Bank Cards and Credit Cards Law” (No. 5464), which entered into force on March 1, 2006. (Bahtiyar, M.: Legal Liability Arising from the Unauthorized Use of a Card Under the Bank Cards and Credit Cards Law, İÜHFM Vol. LXXI, No. 2, p. 71, accessed at: http://dergipark….tr/download/article-file/97826).
According to Article 12 of the aforementioned Law titled “Unauthorized Use of the Card and Insurance,” in the event of the card’s loss or theft, the cardholder may be held liable for damages resulting from unauthorized use occurring within the twenty-four hours preceding the notification, up to a maximum of one hundred fifty Turkish Liras; If the unauthorized use results from the cardholder’s gross negligence or intent, or if no notification is provided, liability rests entirely with the cardholder.
Since there were no specific regulations in consumer law prior to the entry into force of Law No. 5464 on Credit Cards, disputes arising from the unauthorized use of credit cards could only be resolved within the framework of the general provisions of commercial law and the law of obligations.
When examining the legal liabilities of banks, this framework and the scope of the dispute remain limited;
Banks are institutions that operate under a license, subject to the state’s intensive supervision and intervention, and are required to comply with specific principles established for them. This unique situation in the banking sector leads the broad public conducting transactions with banks to harbor a special sense of trust in them. As long as this trust is legally worthy of protection, it subjects banks to different legal liability rules than those applicable to other commercial enterprises and traditional corporate forms (Battal, A.: The Legal Liability of Banks in Light of the Institution of Trust, Ankara 2001, p. 1).
Due to this public trust, banks are subject to a higher standard of care than the duty of prudence required of an ordinary merchant (Turkish Commercial Code No. 6762, Article 20/2).
Indeed, considering Article 99 of the Civil Code No. 818—which was applicable to disputes from the date of its entry into force—and Article 115 of the Civil Code No. 6098, which entered into force later; Since their activities are subject to licensing and require expertise, banks may be held liable even for the slightest errors in the services they provide.
One of the services offered by banks can be defined as “a payment and credit instrument that enables the cardholder to purchase goods and services from certain merchants without making cash payments and to withdraw credit from bank branches and ATMs,” and credit cards are the primary cause of the specific case in question (Yılmaz, E.: Turkey). Credit Card Applications and Their Economic Impacts, Istanbul 2000, p. 124).
Within the legal framework of a framework agreement that creates a permanent debt relationship between the bank and the cardholder, certain obligations arise for the cardholder, the bank, and the operator of the POS terminal where the credit card is processed.
In particular, credit card agreements between the customer and the issuing institution constitute an atypical commercial contract that combines elements of a sales contract, a service contract, and a power of attorney (Atamer, MY: Who Will Compensate for Damages Arising from the Illegal Use of a Credit Card by a Third Party?, Law of the Information Society – A Tribute to Ünal Tekinalp, Istanbul 2003, Vol. 1, p. 1002) and the rule in Section 386(2) of the UK Act, which provides that the provisions of a power of attorney apply to contracts regarding obligations not expressly regulated by law, form the basis of banks’ contractual liabilities in established practice.
In many disputes, the basis for banks’ contractual liabilities is assessed within the framework of the provisions of the agency agreement.
At this point, it would be helpful to briefly discuss the nature of the agency agreement.
The “Agency Agreement,” one of the contracts giving rise to obligations, is defined in Article 386/1 of the United Kingdom’s Civil Code No. 818—which applies to disputes from the date of its entry into force—as follows:
“An agency agreement is a contract whereby the agent undertakes the management of the business entrusted to him in the contract and commits to the performance of the service.” As can be
understood from this definition, the elements of an agency contract include: the agent assuming the obligation to perform, fulfilling the duty to act in accordance with another’s interests and will, the agent undertaking the act of performance (not merely the result of performance), acting independently while fulfilling the obligation to perform, and, though not mandatory, setting a fee for such performance.
In addition, there is also an agency agreement based on the principle of trust.
One of the attorney’s most important obligations is the duty of loyalty.
The duties of loyalty, care, and confidentiality are regulated under Section 390/2 of the English Act; this provision states, “An attorney is obligated to perform the agency duties toward the client in good faith.”
The duty of loyalty arises from the fact that the attorney is performing a task belonging to another person rather than to themselves, and that acting in accordance with the interests and will of the person for whom the task was undertaken is an essential element of the attorney-client relationship. Pursuant to this duty, the attorney is obligated to protect and safeguard the client’s interests in accordance with the purpose of the contract, both during the continuation of the attorney-client relationship and after its termination.
Because of this duty, the attorney must always act in the client’s best interests and direct their conduct in accordance with the outcomes the client seeks to achieve through this contract.In other words, under the duty of loyalty, an attorney is obligated to act in the client’s best interests and to refrain from actions that would harm the client. Even if the contract contains no explicit provision regarding how the power of attorney is to be executed and even if there are no instructions from the client, the duty of loyalty still applies.
In fact, in this specific dispute, in addition to the duty of care owed by the issuing institution and merchant establishments to prevent the unlawful use of the credit card by third parties, there is also an obligation to protect and safeguard the card and the cardholder, as well as to notify the bank as soon as possible upon becoming aware of the card’s misuse.
In cases where the cardholder is not responsible for the card falling into the hands of malicious individuals, the risk of unauthorized use stems from the issuing institutions (Atamer, p. 1019).
Given the fact that the credit card system is highly susceptible to abuse, the bank has no desire to make payments to third parties due to the use of a stolen credit card; therefore, banks enter into contracts containing general terms and conditions that fully shift this risk to the customer. In this manner, if the weaker party to the contract is unjustly victimized and a deviation that undermines the fairness of the contract is identified, the relevant contractual provision must be deemed invalid due to a violation of public order.
At this point, to discuss the plaintiff’s fault, the nature of the crime of which they were a victim must be established.
According to the documents in the file regarding Criminal Case No. 2005/220 of the Kadıköy 2nd High Criminal Court, the plaintiff, a consumer, was the victim of pickpocketing on the day of the incident, resulting in the theft of his wallet, that another person on the same vehicle at the same time was similarly victimized, and that it was alleged that a credit card belonging to the defendants was used for purchases with a forged signature; however, the perpetrator of the pickpocketing offense could not be identified, and the defendant was acquitted due to the lack of evidence proving the commission of the theft offense; it is understood that this theft offense and the conviction, which became time-barred during the court’s appellate phase, are at issue.
Pursuant to Article 141 of the Turkish Penal Code No. 5237, it is understood that the plaintiff, who was convicted of fraud committed through a bank, was also acquitted of the fraud charge. Under Article 142(2)(b) of the same Code, the act of stealing movable property belonging to another person without the owner’s consent, for one’s own or another’s benefit, is recognized as the basic form of the offense; and the final sentence of the same paragraph states that if the crime is committed involving property carried in the hand or on the shoulder, or stolen using special skill, it is punished as aggravated theft; committing the crime described in subparagraph (b) against a person who is unable to defend themselves physically or mentally is considered an aggravating circumstance.
In legal doctrine, it has been noted that, in addition to acts such as taking items carried in the hand or on the person by taking advantage of the victim’s inattention, acts of snatching and pickpocketing committed with special skill are also punishable; however, the terms “snatching” and “pickpocketing” do not appear in the text of the law (Centel, N. / Zafer, H./ Çakmut, Ö.; Crimes Against Persons, 2017, p. 312 ff.).
Since this aggravating circumstance was not separately regulated in the Turkish Penal Code No. 765, which was in force at the time the crime was committed, the act was evaluated under the scope of Article 491, Paragraph 1 of the same Code.
In fact, these issues were also addressed in the decision of the Criminal General Assembly of the Supreme Court dated January 16, 2018,
Case No. 2017/13-588 E., Decision No. 2018/6.
In light of all these explanations, when the specific case is evaluated;
based on the published legal regulations and the manner in which the specific incident occurred, there is no evidence in the file indicating that the plaintiff-consumer acted negligently in the safekeeping and preservation of the card.
As soon as he becomes aware of the situation, he immediately notifies the bank and fulfills his obligations in this regard. In this case, the plaintiff bears no fault for the damage suffered.
Therefore, it is inappropriate for the court to reduce the amount of compensation for which the defendants … and Murat Doğan are liable; on the contrary, since compliance with the Special Chamber’s decision pointing in this direction is required, issuing a written decision of objection is contrary to the law.
Furthermore, since the application of Law No. 5464, which entered into force after the date the dispute arose, is not possible in this specific case, it is not correct for the Special Chamber to overturn its decision that Article 12 of the said Law should be considered from the defendant bank’s perspective;
Within the framework of the principles detailed above, in cases where it is understood that very high-value purchases were made solely by signature based on the plaintiff-consumer’s card usage habits, experts must investigate whether the bank used a system that was inadequate under the conditions of that day and had security vulnerabilities as of the date of the incident, if necessary. The bank’s rejection of the plaintiff’s claim for monetary compensation on the grounds that the plaintiff acted with gross negligence and the defendant bank is not liable is also contrary to the law. Consequently,
the ruling on the objection must be overturned for this separate reason.
CONCLUSION: For the reasons explained in subparagraph (I) above, the defendants’ and Murat Doğan’s attorney’s other objections, as well as the plaintiff’s attorney’s other objections outside the scope of subparagraph (II), have been REJECTED for lack of legal interest, and the plaintiff’s attorney’s objections have also been rejected for the various reasons explained in subparagraph (II). Upon accepting the grounds for the plaintiff’s attorney’s objections and the grounds for the annulment of the Special Chamber’s decision in favor of the defendant Murat Doğan, and in accordance with the different reasons and grounds explained by the defendant Bank, a decision was rendered by unanimous vote on February 14, 2019, following a correction.