Alongs offer loan to bet on European Cup CASH
claims illegal moneylenders advertising services in City
The public is advised not to take out loans from illegal moneylenders to bet on the ongoing European Cup soccer matches. Consumer Association of Sabah and Labuan (CASH) Deputy President Nordin Thani said he had been informed that some illegal loan sharks were advertising loans for betting on the tournament. “They are already advertising their services in and around the City,” he said, adding that gambling is risky business and those who lose would not be able to pay their loans and the illegal loan sharks would trouble them. Nordin also urged the relevant authorities to carry out more spot checks on records of all licensed moneylenders following complaints of harassment from their customers who have settled their loans. He said some moneylenders have been calling their former customers to settle “incidentals” incurred when they took the loan. “Those who lodged their complaints with CASH claimed that the moneylenders continued to harass them despite having settled the loan. The excuse given by the moneylenders was that there were incidentals incurred by the debtors which needed to be settled,” he said. Nordin said the relevant authorities should before renewing the licenses of money lenders, check and ensure that they are in compliance with the law as well as interview the company’s customers. “We are requesting that the moneylenders inspectorate interview the borrowers personally and the company’s statement of accounts be audited by an independent body and copies of the statement be extended to the Federal Finance Ministry as well as the Ministry of Housing and Local Government before any license is renewed. “This way the relevant authorities can find out what is the interest rate charged and how much profit the moneylenders are making,” he said. Nordin also suggested that written permission from the employer notwithstanding from the public or private sector be made a criteria in applying for loans from moneylenders. He also disclosed that in Labuan, moneylenders and their associates are taking advantage of the current economic situation by opening up more hand phone shops, which are a front to illegal money lending services. These premises also operate as pawn shops where customers are allowed to pawn their hand phones for a loan with an interest rate of between 15 percent and 20 percent for a 21-day period. Nordin said similar activities are also widely practised in Kota Kinabalu and pointed out that the compensation paid out to the hand phone owners in the event of theft or fire is inadequate. “This is because the licensed pawn shop owners are only liable to pay a compensation of the pawned amount plus another 25 percent on top of that amount to the affected customers. “This compensation is grossly inadequate considering the original Purchase value of the item. The Pawnshops Act 1972 does not protect the consumers but the pawnshop owners,” he said. According to him, under the Pawnshops Act 1972, the interest allowed to be charged is only two per cent monthly and not the 15 per cent to 20 per cent imposed by pawnshops now. On the outcome of his meeting with consumers in Labuan, Nordin said CASH met with 60 people who claimed to have been cheated by licensed moneylenders who charged them exorbitant hidden interest on the loans. “There were also complaints of the loan agreements being tampered with and despite attempts, including reporting the matter to the authority, the problem remains unresolved. “The moneylenders are not worried about the police reports against them as they told the customers that the authorities concerned are on their side,” he said, adding that CASH had advised those affected to seek legal redress to the problem. To this end, he urged the Government to issue licenses to those who will do business according to the law. Nordin, meanwhile, urged banks to extend a copy of authorization letter to their agents instructed to carry out repossession of defaulters’ vehicles instead of the Repossession Order given to their agents. Nordin said many defaulters have complained of being approached by repossessors claiming to be the authorized agents appointed by the banks but could not produce relevant documents to support the claim. “The banks must also specify the amount of fees charged by the repossessors instead leaving it entirely to them. Some charge up to RM300 for a repossession and storage fees even before the car is taken away,” he said.