Consumers Association of Penang

Giving voice to the little people...since 1970

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?

Suspend activities of credit reference agencies.

Operations of credit reference agencies (CRAs) should be suspended until there are laws to protect the rights and privacy of consumers. We had in 1999 written to Bank Negara, the Ministry of Finance and the Ministry of Domestic Trade and Consumer Affairs proposing the introduction of laws to protect consumers. We had also asked Bank Negara to direct the financial intuitions not to use the services of CRAs until such protection is available to consumers

Legislate credit reference agencies

Once again we urge the government to legislate credit reference agencies (CRAs) - companies that provide credit information on individual borrowers. We had in December 1999 asked that CRAs be licensed, controlled and regulated.

One of the disadvantage of non-regulation is that non-financial institutions are using CRAs as a means to collect their payments and in the process jeopardize the individual’s loan application.

Call for a consumer credit act

It is confusing to have different laws dealing with different types of consumer credit. Depending on the type of credit facility, it could be under the Pawnbrokers Act, or the Money Lending Act or the Banking and Financial Institutions Act or even the Hire-Purchase Act.