Consumers Association of Penang

Giving voice to the little people...since 1970

Bank charges – stop the extortion racket

Bank charges have become purely a money making scheme for the banks. This is the only logical conclusion since the fees bear no resemblance to the actual cost borne by the banks.

It is time the authorities put a stop to excessive bank charges. (We estimate that banks earned in excess of RM1 billion in 2004 from banking fees and charges.)

Unfair banking charges are many and vary from bank to bank. However looking at some of the fees connected with housing loans is sufficed to show how unreasonable the fees are.

Concurrent actions to recover loans are unfair

The practice of using concurrent actions to recover loans by banks should be disallowed by Bank Negara. This practice is unfair for it unnecessarily increases the debt of the borrower.

In housing loan agreements, there is a clause which gives the banks the right to recover the debt by filing foreclosure proceedings to auction the property and also a civil suit all at the same time.

Borrowers ripped-off by housing loan contracts

The only way to protect Malaysian consumers is to have an Unfair Contract Terms Act similarly to that in the United Kingdom (UK). With such an Act, once the term or clause is deemed unfair, it becomes unenforceable. It then becomes irrelevant to the borrower how many of such unfair terms are in the contract as they are considered null and void.

Banks creating debt traps

The disturbing trend whereby banks entice consumers to take up personal loans should be stopped before more consumers fall into the debt trap.

Bank or licensed Ah Long?

Some banks charge higher interest than moneylenders. When a bank charges interest on a loan at a rate that is higher than that of a moneylender, does it not make the bank a licensed Ah Long?