SPOUSES YULO V BPI G.R. No. 217044 January 16, 2019

FACTS

Petitioner spouses Rainer Yulo and Juliet Yulo are both credit card holders of the respondent, Bank of the Philippine Islands (BPI). When the petitioners had been delinquent with their payments, BPI started to send out demand letters and later on filed a complaint for sum of money against the petitioners. Spouses admitted that they used the credit cards issued by the Bank of the Philippine Islands but claimed that their total liability was only P20,000.00. They also alleged that the Bank of the Philippine Islands did not fully disclose to them the Terms and Conditions on their use of the issued credit cards and also, BPI failed to prove their liability. The lower court ruled in favor of BPI and ordered petitioners to pay the bank the sum of P229,378.68. Petitioners filed an appeal with the Regional Trial Court and Court of Appeals but was both denied. The Court of Appeals found that the Yulo Spouses' failure to contest the charges in the monthly Statements of Account signified that they accepted the veracity of the charges. It further noted that Rainier, an insurance underwriter, was familiar with contractual stipulations; hence, he could not feign ignorance over his own contractual obligation to the Bank of the Philippine Islands.

ISSUE

Whether or not petitioners Rainier Jose M. Yulo and Juliet L. Yulo are bound by the Terms and Conditions on their use of credit cards issued by respondent.

RULING

No. As the recipient of an unsolicited credit card, the pre-screened client can then choose to either accept or reject it. When petitioners accepted respondent's credit card by using it to purchase goods and services, a contractual relationship was created between them, "governed by the Terms and Conditions found in the card membership agreement. Such terms and conditions constitute the law between the parties.". However, when issuing a pre-screened or pre-approved credit card, the credit card provider must prove that its client read and consented to the terms and conditions governing the credit card's use. Failure to prove consent means that the client cannot be bound by the provisions of the terms and conditions, despite admitted use of the credit card. With respondent's failure to prove petitioner Rainier's conformity and acceptance of the Terms and Conditions, petitioners cannot be bound by its provisions. The Metropolitan Trial Court ruling was affirmed by both the Regional Trial Court and the Court of Appeals. Since petitioner did not consent to the Terms and Conditions governing his credit card, there is a need to modify the outstanding balance by removing the interests, penalties, and other charges imposed before.