The office of public counsel is calling for legislation that would address a number of consumer-rights issues surrounding financial institutions, especially in relation to credit.
Legal officer Summer Chandler, with the Public Counsel’s office, said transparency was a crucial aspect of credit transactions and pre-contractual statements should be required by law to include basic information such as the lender’s name and the amount of credit being offered.
“These things may seem pretty basic but we have had [people] who seemed not sure about what were the credit fees, what were the charges [or] the method of interest calculation. . . ,” she said last Thursday during a public lecture at the Warrens Office Complex to mark World Consumer Rights Day.
Chandler said credit defaulters were becoming a “significant problem” and financial institutions may need to be equipped to delve “into whether a particular consumer can actually afford to pay back that loan”.
“It makes no sense loaning a consumer . . . when it’s clear that maybe within a few months [s/he] will default.
“There needs to be some kind of system where you can inquire into whether or not a consumer would be able to really pay this particular loan or whether they would default,” she said.
The attorney-at-law added that the office has also had to deal “with matters against financial institutions particularly with respect to credit cards”.
She said, “we’ve dealt with issues where [people] have decided that they’re going to travel abroad [and] they want to use their credit card.
“They inform the bank . . . they make sure their credit is in a healthy state and then when they get abroad, they cannot use the card and that may be their sole means of purchasing items.
“In cases like that, the financial institution was then made to compensate that individual. . . ,” she said.
Chandler also said that in some cases customers’ credit cards were “cancelled for no apparent reason”.
She noted that there has been a “rapid increase” in Internet banking but there was some uncertainty as to whether there was adequate legislation to protect or regulate the practice.
This, she said, could pose problems for both consumers and regulators.
