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Category: Financial Literacy EN

Developers Should Not Provide Housing Loans

The Consumers Association of Penang is strongly against the Urban Wellbeing, Housing and Local Government Ministry’s decision to allow developers to give out loans under the Money Lenders Act 1951 (Amendment ) 2011 . According to the Minister Tan Sri Noh Omar this is a win-win situation. With all due respect, there is only one obvious winner from this scheme and that is the developer. After all...
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Unfair Contract Terms in Auctions

Consumers are faced with very unfair contract terms in the Condition of Sale when they take part in auctions.These terms are one-sided and put the bidder/purchaser in an extremely disadvantaged position at auctions.   Under Section 24 of the Consumer Protection Act 1999, unfair contract terms are illegal and therefore unenforceable. These unfair terms found in the Condition of Sale at auctions...
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Debt Collection Must Be Regulated

The country’s household debt is high at 88% of the Gross National Product and with an average debt repayment ratio of around 44% (that means that 44% of the income goes to settling debts) Furthermore, as many as 55 people on average being declared bankrupt every day.That means that many people have been unable or may soon be unable to pay their monthly instalments. With so many Malaysians in...
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Abolish the Service Charge

The Consumers Association of Penang is surprised not only by the fact that our government has given in to pressure so easily and allowed the service charge to remain, but also at the reason given as to why the charge is necessary. The statement made by the secretary-general of the Domestic Trade, Cooperatives and Consumerism, Datuk Seri Alias Ahmad, is that “the basic wages in some hotels...
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Bank Negara Must Stop Banks from Using Unfair Methods of Calculating Interest

Banks should be stopped from taking unfair advantage of borrowers with personal loans or fixed rate hire-purchase loans (of either the conventional or Islamic financing variety. ) These borrowers lose twice over because interest on the loans are calculated on a flat rate basis and rebates are calculated based on the Rule of 78. The flat rate method charges interest on money which has already...
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Concerns Regarding Our Cyber Security And Electronic Banking Still Unanswered

The Associations of Banks in Malaysia (ABM) has endeavoured to address the Consumers Association of Penang’s (CAP) concerns regarding Malaysia’s cyber security but unfortunately have left many queries unanswered. CAP believes it is necessary that we spell out our concerns clearly and in detail once more, so that they may be addressed appropriately; and we hope that relevant parties...
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Is Our Cyber Security Non-Existent?

The issue of the Latin American gang that hacked into some of Malaysia’s ATM’s (automated teller machines) and absconded with a little over RM 3 million is both frightening and eye-opening. It should be an indication to us that our cyber security is grossly lacking and perhaps our money and personal information are not as safe as we once thought them to be. If you have been following...
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Mortgagees Overinsuring for Fire Insurance of Mortgaged Properties

Banks are exploiting mortgagors by taking out fire insurance on the mortgaged properties to cover the full amount of the loan which in almost all cases will be about 90% of the market value of the properties. Market value is the combination of the cost of the land and of the building on it. Fire insurance does not cover land, but only the cost of re-building the building(s) on it. In a worst...
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Response to Inceif‘s Accusation of CAP

We refer to the Global University of Islamic Finance (Inceif) accusation that CAP’s claim that Islamic personal loans offered by banks are a rip-off is baseless. On 16th December 2013, CAP had made a press statement that a loan with an effective profit rate of 42% was a rip-off. We   regret that Inceif has itself made a baseless statement against CAP for it has not refuted...
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Banks charging 42pct per annum for personal loan

Believe it or not, a bank loan can turn out to be more expensive than a loan from a moneylender. For one bank the profit rate for its ‘Islamic’ personal loan can be as high as 42% per annum. The profit rate, like the interest rate, ensures profits for the bank on a loan extended to the public. Bank Negara should not condone this ‘Ah Long’-like profit rate. The profit on...
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