Consumers Association of Penang

Giving voice to the little people...since 1970

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?

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