SPC vows stronger investor protection

China's top court has underscored the role of financial tools in promoting technological innovation, pledging to strengthen legal oversight to prevent harm to consumers and foster a sound business environment governed by the rule of law.

The Supreme People's Court, together with the People's Bank of China, the National Financial Regulatory Administration and the China Securities Regulatory Commission, released details of six typical cases recently involving the protection of the lawful rights and interests of financial consumers and investors.

One case involved a fund company that used its technological advantage to unilaterally change the dispute resolution method through its mobile app after investors had already subscribed to its products. The court ruled that the change was legally ineffective.

In December 2015, an investor surnamed Fang invested 1 million yuan ($149,650) in a fund product offered by the company. The investment suffered losses, and by the time Fang redeemed the product through the company's app in December 2024, the cumulative loss had reached about 380,000 yuan.

Fang alleged that the company had misled investors with false promises of "low risk and high returns" and should therefore bear liability for the losses. In September 2025, Fang filed a lawsuit against the company in a Shanghai court.

Before the first hearing, the company argued that the dispute should be settled through arbitration rather than litigation. It subsequently upgraded its app and revised the dispute resolution clause.

In October 2025, Fang found that accepting the arbitration service agreement online had become a prerequisite for logging into the upgraded app, effectively requiring the dispute to be referred to an arbitration commission.

"I didn't agree to any dispute resolution method when I purchased the fund product, and the company closed its offline offices around 2018. As a result, the app became my primary way to check product information and handle subscriptions and redemptions," said Fang, 74. "I logged into the app to prepare for the trial by checking my losses, but by then it had been upgraded,  and I was forced to accept the service agreement."

After examining the case, the Hongkou District People's Court ruled that arbitration must be based on a valid agreement between the parties. In this case, the fund company presented the service agreement through its app, but users could not continue using the app without accepting its terms.

"This conduct violates the principle of voluntariness in arbitration. Therefore, the arbitration agreement was not binding on the other party, and the case should be resolved through litigation," the court said.

The SPC highlighted the case's significance in curbing financial institutions' use of technological advantages to unilaterally alter dispute resolution methods. The ruling also safeguards financial consumers' and investors' right to choose how their disputes are resolved, the court said.

The case underscores the need to protect fairness and the lawful rights and interests of financial consumers in the era of digital finance, the SPC added.

The other cases released on Monday cover areas including financial lending, life insurance and securities investment.

The SPC called on courts nationwide to work with financial regulators to resolve disputes through a range of approaches. It also urged efforts to streamline rights protection procedures, shorten case-handling times and reduce the costs of seeking remedies, providing financial consumers and small and medium-sized investors with more convenient, efficient and affordable dispute resolution options.

caoyin@chinadaily.com.cn