The Consumers Association of Penang calls on the Malaysian Bar Council to immediately direct its members to refrain from billing charges for preparing Change of Name forms and Vesting Orders for changing bank names in charge documents when discharging properties from banks that have changed names due to mergers. The cost of changing the banks’ names in the charge documents are to be borne by the banks concerned and not by the Chargors.
This call is made in reference to a complaint case that CAP referred to the Association of Bank Malaysia and who later confirmed that the particular bank in question i.e. CIMB had explained to the Association that the fee imposed for changing the Chargee from Southern Bank to CIMB should be borne by the bank itself since the matter is related to a vesting order under a bank’s merger exercise.
The solicitors normally charged the Chargors a fee of RM300-00 for preparing the Change of Name forms and a further RM110-00 for registering the forms and Vesting Orders. This was in addition to the normal fees and disbursements for the discharge.
As the RM410-00 for Change of Name should be borne by the banks, the Bar Council should also direct its members to make a full refund to all their clients that have been wrongly charged for the Change of Name documentation and filing. The failure of the Bar Council to act to protect the interests of the public must have cost hundreds of thousands of Chargors tens of millions of Ringgit.
It is regretted that the Bar Council did not see this injustice being inflicted on Chargors by its members who were attending to discharge of properties from banks that had changed names.
During the past decade the smaller banks were merged with the bigger banks. As a result, people who had taken housing loans from the smaller banks became caught in a legality as the banks with which they had signed the loan agreements no longer existed. The new Banks informed them that their loan payments should henceforth be made to “xxx” bank. This, the borrowers did and are still doing.
However, when the loans are fully settled the new banks are unable to discharge the properties straightaway as the charge documents do not bear their names and therefore they have no locus standi to give a discharge. The banks’ name change in the charge documents has to be done first, i.e. from the bank that originally gave the loan to the bank that is now going to give the discharge. This incurs expenses.
Conveyancing solicitors have been taking it upon themselves to prepare the Change of Name forms and registering these and the Vesting Orders at the Land Office. These costs come up to RM410-00 and are charged to the Chargor. This is most unfair as the Chargors have nothing to do with the banks’ change of names and therefore they should not have to bear any costs related to the preparing and filing of Change of Name documents and Vesting Orders.
Since all costs related to the change of name and vesting orders are to be borne by the banks, a full refund of the same is due to them. The solicitors had been wrongfully making the Chargors pay them a professional fee of RM300-00 for preparing the Change of Name forms and a further RM110-0 for registering that form and the Vesting Order at the land office.
Consumers who had had to pay for the banks’ change of name at the time of discharging their properties should claim back the money paid for this purpose from their solicitors. The solicitors should have billed the banks for the Change of Name transactions and not the Chargors.
Letter to press, 29 January 2013