CONTROVERSY over Hongkong Telecom's surcharges for fax lines has prompted one of its biggest customers, Hongkong Bank, to seek a rebate covering all 360 of its lines - which could cost the communications company at least $100,000. It is also forcing Telecom to come up with a policy which may open the floodgates on a huge number of similar requests from its 170,000 fax customers. ''It appears that the justification for the surcharge has disappeared so naturally we are expecting a rebate,'' said Tim Cureton, manager of group telecommunications at Hongkong Bank. He said his letter to Telecom represented a notification that a refund was expected rather than a request. The modernised network meant that special fax lines were no longer necessary, he said, and the bank had not requested the extra services, such as a listing in the fax directory, that the surcharge brings. In addition, any hint of legal grounds for the surcharge, currently $40 a month for business users, was removed at the end of last month, although Telecom remains free to offer extra services to those who want them. ''Given these things and that we have not requested any special service, we believe that it would only be fair for the telephone company to offer a refund,'' Mr Cureton said. The bank is one of the biggest fax users in Hong Kong with, one-in-500 of all the territory's fax lines, and Mr Cureton said he expected the rebate to cover at least this year to date or perhaps a full 12 months. Hongkong Telecom has acknowledged the letter but said it had yet to form a policy on the issue. It refused any further comment, citing customer confidentiality, and also declined to say whether this was an isolated case. The company's right to demand that customers pay extra for connecting a fax has been unclear. At the end of last month, the Office of the Telecommunications Authority amended legislation using the Government Gazette, ending all suggestion that the charge was compulsory. Some customers who have had their fax lines reclassified as ordinary lines following the controversy have reported a sharp drop-off in junk faxes.