The Star, Saturday June 13, 2009

Excessive charges the main grouse

By YVONNE TAN

“The benefits of the recent reduction cannot be enjoyed immediately as there are terms and conditions attached to it. It’s pure marketing talk, ” says secretary-general Muhammad Sha’ani Abdullah.

Muhammad Sha’ani Abdullah ... banks already make enough as every time a transaction goes through, they get 2%

Muhammad Sha’ani says banks already “make enough” as “every time a transaction goes through, the banks get 2% before anything else.”

“If term loans are charging 10% interest rate, why must credit card charges be almost double?” he questions.

Muhammad Sha’ani suggests that banks allow cardholders to reschedule loans by converting their credit card balances to term loans with a 10% interest rate.

President of the Consumers Association of Penang (CAP) S.M. Mohamed Idris says one of the clauses the association found unfair in a credit card contract is the one which holds the cardholder liable for all transactions, carried out with the use of the credit card irrespective of whether the transactions were authorised or not.

According to him, if a transaction is unauthorised and it can be proven to be so, the bank should not make cardholders pay for it.

“Yet banks use this clause to hold cardholders responsible for transactions carried out with their lost or stolen cards,” he says.

Patrick Chong ... instead of going on a merry go round, why don’t banks just reward their customers by offering them a special rate?

According to Bank Negara’s credit card guidelines, a cardholder should not be held liable for more than RM250 if he or she has reported the loss of the card as soon as “reasonably possible”.

Meanwhile, what do credit card consumers have to say?

Ginger Leong , a teacher in her 20s says banks are unfair in penalising their customers when they make “once-in-a-while” late payments. This is especially if the customer had previously made payments in full.

“When we make our payments in full or sometimes even more than what is required, banks do not reward us, but when we are late once in a while, we are made to pay a late fee. This is unfair,” she says.

Kelvin Hunt, a design engineer, has a long list of grouses.

“First is the annual fees. I understand that I can get a waiver of my annual fees only if I call the bank’s call centre. Of course, this only applies to certain banks. This is absurd since most banks today are providing lifetime annual fee waiver. This should be automatically enforced to minimise consumers’ expenditure,” he says.

Hunt also highlights his concerns on late payment interest charges. “I have been charged on numerous occasions with regard to this, as I am constantly on the move to various remote locations due to the nature of my job, which means that I am unable to make prompt payments at times.

“During such times, I have been called by representatives of banks to remind me of payment due and that they would be charging me interest while blocking my card simultaneously,” he says.

Hunt also claims that he has been a victim of fraudulent charges twice in relation to petrol pump charges. “I had paid cash over the counter since the initial swiping of my credit card on the pump terminal was defective. But my card was still charged.”

S.M. Mohamed Idris ... if a transaction is unauthorised, the bank should not make cardholders pay for it.

He called the card centre and was told that this particular petrol station was already being monitored for fraudulent transactions.

His main grouse: “If the bank had knowledge of fraudulent incidents, why didn’t they just block all card users from patronising this station? Why wait till someone is cheated again?”

Patrick Chong, a long-time credit card user feels the idea of banks getting customers to “save” money when they transfer their other credit card balances to just one bank is rather futile.

“Instead of going on a merry go round and transferring balances here and there, why don’t banks just reward their customers especially those who have been with them for a long time by offering them a special rate so that they can pay their balances off faster without complications?”

In challenging times like these, customers do not need to be inconvenienced any further and “help” from banks need to be genuine, he says.

“Furthermore, the lower interest rates only apply to balances transferred from other credit cards and not on the balance with that one bank to which other balances have been transferred to.

“At the end of the day, you don’t save all that much,” Chong says.

Evan Gomez who recently received a credit card on account of her “good credit history” with a certain bank says she contacted the bank to cancel it as she does not see a need for it.

“I was shocked to see that I was being charged for it later which meant that the bank personnel did not cancel the card as earlier requested.

When I called up the bank to cancel the card yet again, they said I needed to settle the charges first, only then will they cancel the card.

“This is irresponsible behaviour on the bank’s part!” she says.