Year: 2011

General insurance companies should insure motor vehicles based on the agreed value. Many policyholders are already under the wrong impression that they own an agreed value motor policy. They are unaware that in Malaysia, motor insurance policies are indemnity policies. This means that if the car is written off as a total loss, the amount compensated by the insurance company will only be its...

The Consumers Association of Penang disagrees with those who recently voiced their opinion that the amendments to the Co-operatives Act 1993 will kill the co-operative movement. Many of our local co-operatives do not operate in the spirit in which co-operatives are founded - which is mutual help to improve the social and economic well being of its members. Many times co-operatives end up...

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....

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. The clause...

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. Furthermore, even if the levying of certain costs is...

The disturbing trend whereby banks entice consumers to take up personal loans should be stopped before more consumers fall into the debt trap. Recently a bank sent personalised letters to the employees (whose salaries are directly credited into their accounts with the bank) of a multinational company offering each a personal loan of RM5,000. “Fast Cash Without Hassles – only a tick & a...

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? When banks charge a compound interest on loans, when licensed moneylenders do not, does it not make them licensed Ah Longs? Banks and Ah Longs, what is the difference? The truth is that often consumers find...

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...

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...

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. With the uncertain economic times, it is best that consumers avoid signing up for any new credit facilities. They should not be...