Thursday July 9, 2009

By AU YEONG HOW

 The public can access information on 3,000 authorised moneylenders nationwide through E-Maps:

Electronic Money Lender and Pawnbroker System, a government portal to assist borrowers. If you need to borrow money urgently, do not take a loan from unlicensed moneylenders or Ah Long. Instead get the service from any licensed moneylender. The Housing and Local Govern­ment Ministry Secretary-General Datuk Ahmad Kabit said people can get loans from about 3,000 authorised moneylenders nationwide.

Ahmad Kabit: This will invariably prevent the Ah Long menace and educate our society and prevent people from borrowing from unscrupulous individuals. He said to facilitate the public to check on these licensed moneylenders, the ministry has a portal called E-Maps: Electronic Money Lender and Pawnbroker System to assist borrowers.

 “The portal E-Maps is at our website (www.kpkt.gov.my) which was launched last month. “Through this system, the public can get information about the licensed moneylenders’ companies and their status,” he said. He said among the information available on the web are the contact numbers, license and permit number and expiry date, registered address and the company’s management staff and directors. Ahmad said the government was very concerned about the Ah Long menace and hence the ministry was duty bound to look into all issues related to license moneylenders in order to protect borrowers’ rights and interests.

To regulate the moneylender activities and effectiveness, he said the Ministry has established the Moneylenders and Pawnbrokers division to protect the interest of the borrower. Ahmad said the role of the division was to formulate policies, issue licenses to eligible moneylenders and implement rules and regulations to govern them. Among the regulations introduced are Moneylenders Act 1951 (Act 400) and Moneylenders (Control and Licensing) Regulations 2003 and Moneylenders (Compounded Offence) Regulations. Licensed moneylenders are a valid entity and registered with the ministry and the authorised moneylenders must display the original license issued by the ministry at their registered premises.

“Our society has been plagued with Ah Long issues and the problem has been a thorn in the flesh for sometime. Hence, we are urging the public not to borrow from unauthorised operators. “This will safeguard them from violent harassment that may cause harm and the loss of life,” Ahmad said.

Recently, the media reported how three men were chained, confined in a small cell and not fed adequately like the detainees in Guatanamo, Cuba or Abu Ghraib prison in Iraq. Harsh punishments were meted out after they were unable to pay debts amounting to RM4,000. Realising the severity of the Ah Long issue, Ahmad said the Government through the ministry advised people not to deal with Ah Long for quick money and choose other legal establishments and financial institutions.

Moneylenders and pawnbrokers come under the supervision of his ministry and people should apply for loans from banks, cooperatives and other licensed establishments. Ahmad said, the objective of setting up licensed moneylenders and pawnbrokers is part of the Government’s social obligation to help those who are in need of financial assistance. “This will invariably prevent the Ah Long menace and educate our society and prevent people from borrowing money from unscrupulous individuals,” he said.

People who borrow money from licensed moneylenders are advised to understand the guidelines and the portion in agreement so that the interest of both parties are protected. He added borrowers need not worry because they are protected under the rules and regulations of the Moneylenders Act 1951 compared to unauthorised dealers who resort to violence should the borrowers fail to settle their dues.

He said the majority of the borrowers take up Ah Long loans because they do not bother about the high interest charged should they default in payments. “This is a stark contrast with borrowers from the licensed moneylenders where the interest rates do not exceed 12% annually or one percent per month for loan with collateral. “The interest rate for loan without collateral does not exceed 18% annually or 1.5% monthly,” he said.

Besides more stringent enforcement by the Ministry’s officials, he said they have also collaborated with the police to tackle the Ah Long menance. Ahmad reiterated that the Ministry was reviewing the existing moneylending laws, especially the Moneylenders Act 1951 to make them more relevant. He said they hoped more stringent laws and punishment would be introduced to stop this illegal moneylending activity.

The Star online

Tuesday June 23, 2009

By CHEN PELF YEEN, MALACCA:

A 23-year-old victim of an on-line phishing scam wants the authorities to investigate a website similar to that of  a reputable local bank who duped unsuspecting account holders. University graduate Tey Hock Lin, from Batu Berendam said he lost RM5,000 to the scam after transferring money to a third party.

Victim of scam: Tey showing the email sent to him. “I received an email from a sender whose name and website interface was very similar to that of a famous local bank. “The email requested me to update my account due to inactivity on May 12. “Soon after, I keyed in my username and password and received a SMS with a transaction authorisation code number which was required to confirm the procedure on-line,” he said at a press conference here.

He said he suspected nothing amiss as the website interface was a mirror to the ones used by a local bank. “However, I was shocked when the bank called and said some money from my account was siphoned out,” he said. He added bank had traced the details of the recipient and advised him to lodge a formal complaint with the bank as well as make a police report. “I am sad to learn that I can’t get back the money easily,” he said, adding the bank had also issued him a third party transfer receipt with the account holder’s information.

Tey decided to track down the recipient via Internet and traced the person’s whereabouts to Wangsa Maju in Kuala Lumpur. “The person concerned claimed to be a financial advisor in Wangsa Maju who admitted that money was transferred to him. “However, he refused to return my money saying that he was merely carrying out an on-line business to earn extra income via a contact in Romania,” he added. Tey added the additional information was handed over to the police to assist investigations.

 Meanwhile, Ayer Keroh assemblyman Khoo Poay Tiong advised members of the public not to fall prey to such dubious schemes. “I hope the police and Bank Negara will work hand-in-hand to prevent others from being duped by similar on-line scams,” he said. He urged the authorities to act swiftly on the culprit following the victim’s discovery of a link to the on-line scam based in Kuala Lumpur.

When contacted, a bank officer confirmed that Tey had lodged an official complain with them. However, the officer refuted Tey’s claim that the bank was slow in investigating his complaint as such matters were time consuming. Alor Gajah Commercial Crime Chief Inspector Ahmad Jamil confirmed receiving Tey’s report, added that the police had requested Bank Negara to investigate the recipient’s account. The police officer added they would contact Tey if there were developments to the investigation.

The STAR online

Tuesday June 9, 2009

 KuAlA LUMPUR:    At least 66 people paid the price for their ignorance when they were cheated of their money after making Internet purchases of skincare products from someone named “Big Pussycat.” The victims made online transfers amounting to RM73,445.10 for the products which came under names such as “My Beauty” and “My Sherman Beauty” that had been advertised on “Big Pussycat’s.” website.

 These products included facial and eye masks. Salesman Chong Wei Lun, 29, made purchases totalling RM2,910 for his girlfriend on May 4 but the products never arrived. “The price of the items was cheaper than those off the shelf,” he said as he explained why he was lured by the advertisement. Chong was one of the 11 dissatisfied customers who turned to MCA Public Services and Complaints Department head Datuk Michael Chong to voice their grievance.

At a press conference yesterday, another victim Winnie Tan, 20, said she discovered that she had been ripped off only after her friends told her to do a more thorough check on the advertisement. She saw website postings warning people that the sale of the skincare line was not genuine. Michael Chong advised the public, especially young people, to be more cautious when buying goods featured on the Internet, adding that he would submit all the complaints to the police.

The STAR online

Thursday May 28, 2009

By GLADYS TAY

Wednesday May 27, 2009

The STAR online

Plain Speaking – A Column by Yap Leng Kuen

Under new system, rates may be set based on portfolios of loans and creditworthiness CONSUMERS may not be getting flat rates on their loans once a new pricing approach called risk-based pricing takes place. Under this new system, different interest rates may be set not just based on different portfolios of loans but also different types of customers.

The more creditworthy consumers who show, among other things, that they can repay promptly and do not over-borrow, will likely obtain better interest rates. This also depends on the banks they use, as banks with more efficient capital and risk management will be able to give lower rates.

In a recent interview with StarBiz, Malayan Banking Bhd president and CEO Datuk Seri Abdul Wahid Omar explained: “Under Basel II, we are looking at the credit standing of borrowers which will be based on our own internal risk ratings. Therefore, the rates offered may differ from one bank to another. Quality borrowers would enjoy lower priced loans.’’ Some banks may have a rating scale of 1 to 10 while others may implement a scale exceeding 10 or even 20 grades.

“So for each rating, we will actually compute, among other things, the probability of default, exposure at default and loss given default. The actual numbers would depend on a bank’s own default experience. “The risk weights assigned to borrowers may range from a low of 15% to more than 200%, depending on their rating grades. Some investment-grade borrowers such as government-linked investment companies may carry the lowest risk weights,’’ he said.

 For the corporate and business segments, the risk weights are assigned on an individual basis, while for the retail segment, it is usually assigned on a portfolio basis, he added. For a consumer to qualify as a good borrower, he or she must ensure that they have an unblemished credit track record.

In the case of companies, the key drivers include, among other things, good management, ability to repay and sound cashflow. Credible credit plans and historical cashflows will form an important part of the companies’ evidence that it can repay its debt. Much thought is likely to be centred on how to avoid a poor credit assessment. At the outset, it is advisable to understand the type of documentation the bank is looking for, as well as its approach to credit risk assessment.

“In terms of loan pricing, risk weights assigned may be reduced through availability of quality collaterals. As such, a bank may be able to price its loans lower given good credit rating and supported with quality collaterals,’’ Wahid said.

Therefore, when it comes to shopping for a loan, one should start making enquiries on when this new development is likely to take place and the best deals that can be obtained from individual banks. When that happens, it is likely to be true competition based on proper calculations and not just in response to “pressure’’ or requests from buyers who shop in between banks, giving rise to a situation that has been described as “irrational competition’’. Senior business editor Yap Leng Kuen believes that when it comes to dollars and cents, it is best to be vigilant and not leave anything to chance.

Saturday May 9, 2009

A QUESTION OF BUSINESS

By P. GUNASEGARAM

IT is unfortunate, for the customer that is, that old, archaic banking practices such as hire purchase continue to be foisted on them.

They are a problem because hire purchase companies, most of whom are now banks, still quote a flat rate.

That means the rate is quoted on a principal that does not decline with payment. While on paper the rate looks low, the effective interest rate is actually high, sometimes as much as two times depending on the tenure of the facility.

Thus, many unsophisticated consumers are seduced into buying all manner of consumer goods from cars downwards because they think they are paying low interest rates when effective interest rates are much higher.

For illustration, a flat rate of 10% with tenure of five years works out to an effective over 17%, quite a difference!

Yes, the Hire Purchase Act comes under the purview of the Ministry of Domestic Trade and Consumer Affairs but that does not mean that banks and financial institutions cannot state the effective interest rate too in addition to the flat interest rate.

If financial institutions don’t want to state the effective interest rate, they may be misleading millions of misinformed customers into believing they are paying lower interest rates than they actually are.

Perhaps Bank Negara can require financial institutions to state the effective interest rates for these loans at least for the institutions that come under its purview.

Hire purchase apart, there are myriad interest rates and offers which make it very difficult for bank customers to determine which are the best for their purposes and which eventually give them the best deals.

Breaking up various charges such as late penalty charges for credit cards as well as additional charges for overseas purchases for instance into effective interest rates can greatly assist customers to determine the full cost of using these services and make their decisions accordingly.

With the increased sophistication of banking services and all manner of charges which can affect the effective interest rate that customers pay, it becomes imperative that services, especially to the retail sector, be clearly explained so that the consumer knows what he is getting himself into.

One of the key factors that many retail customers have to worry about these days is whether they would be better off refinancing their housing loans where tenures are typically very long and even a minute change in interest rates can affect considerably the total amount paid.

While most housing loans are variable and pegged to the base lending rate of the respective banks, many customers are simply not aware that refinancing their housing loans at current much more attractive rates can save them tens of thousands of ringgit over the tenure of their loans, even after paying the requisite penalties.

While there are moving costs, sometimes the mere threat of refinancing by the customer often nudges the current loan provider to give interest rates at lower than agreed levels. For that the customer needs information.

There is a wealth of such information available at a website (http://www.bankinginfo.com.my) maintained by Bank Negara using data provided from the Association of Banks in Malaysia.

That is a pretty good starting point for those who want to start by comparing rates and others services.

Bank Negara and the Association of Banks are to be heartily applauded for the information provided. It not only includes such data but also information on banking, budgeting, personal finance and financial and budget calculators.

Ultimately customers too have a responsibility to educate themselves about financial matters, which are getting increasingly complex. They ignore financial knowledge and analysis at their own peril.

Managing editor P. Gunasegaram asks you to check out “bankinginfo” at http://www.bankinginfo.com.my for yourself.

Friday May 8, 2009

By DALJIT DHESI PETALING JAYA:

The “archaic” Hire Purchase Act is in urgent need of review, especially more so in the current tough economic environment, say consumer groups and economists. Many view the legislation, which is over 40 years old, as among others, imposing additional burden on consumers and defeating the Government’s initiatives in stimulating the ailing domestic economy. Consumers Association of Penang (CAP) president S.M. Mohamed Idris said amendments to the Act were urgently needed as current quoted rates did not reflect real or effective interest rates. S.M. Mohamed Idris … The current quoted interest rate gives the wrong impression.

 “Bank Negara should make a ruling that all interest rates quoted for loans should be the effective rates as they reflect the true cost of borrowings,” he told StarBiz.

“The current quoted interest rate gives the wrong impression because the actual interest rate is roughly almost twice that is advertised.” RAM Holdings Bhd chief economist Dr Yeah Kim Leng agrees that the legislation needs to be updated. “We should be looking at enacting competitive laws so that unfair trade practices, including predatory pricing and non market-based price-fixing practices as exemplified by the current situation can be curbed. “We need more consumer activism and education on the one hand, and regulations that promote fair trade practices and market competition on the other hand,” he said.

Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias Alias said the disclosure of effective interest rates would improve information transparency and benefit consumers. By doing that, consumers could clearly see how much they were really paying for their loans, he said. Currently the rates quoted by banks for hire purchase loans are based on flat interest rates and variable rates (the latter will vary according to the movement of the base lending rate).

Most would opt for the flat rates which are based on the non-reducing principal basis. This means the interest charged by the bank on the borrower (based on the original financing amount) remains the same for the whole tenure. Hire purchase transactions are governed by the Hire Purchase Act 1967 and administered by the Domestic Trade and Consumer Affairs Ministry.

An official from the ministry said it was in the midst of reviewing the legislation on hire purchase, but did not specify when it would be completed. “We are looking at some specific areas which may be revised and have consulted our legal advisers on this matter,” said the official, who declined to be named. National Consumer Complaints Centre chief executive Muhammad Shaani Abdullah, who is also Fomca secretary-general, called for the legislation to be abolished.

He said a special law, for example, a Consumer Credit Act, that governed hire purchase, money lending and pawnshop activities under one roof should be introduced instead. “The law should protect consumers and not victimise them for others to profit. It should also limit fancy ways of calculating interest rates,” Shaani added.

Idris of CAP agrees that a comprehensive Consumer Credit Act should cover all credit facilities, saying this meant there would be no need for separate laws on hire purchase. Until then, banks should quote the effective interest rate, and change the calculation of refund for the early repayment of loans and a court order should be required to repossess goods, he said, noting that getting a court order for repossession and quoting effective interest rates by lenders were practised in Britain. On whether the Act should be reviewed, the Association of Banks in Malaysia has this to say: “The Act already contains provisions for the protection of consumers which are well-tested over time. For example, the Second Schedule of the Act requires the financier to provide the borrower with detailed information about the transaction including the term charges and the rate applicable. The Act has been continually reviewed and any further review would be welcomed.”

http://www.themalaysianinsider.com

KUALA LUMPUR, April 25 — Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) has urged the government to require all multi-storey residential units to change their bulk water meter to individual meters. Syabas Corporate Communications and Public Affairs general manager Abdul Halem Mat Som said this was necessary to tackle problems faced by the residents with the building management regarding water and bulk meter issues. He said the problem that often occurred was when the building management failed to settle the bills with Syabas, causing all the residents unable to get water when supply to the bulk meter was cut.

 “Syabas views this issue seriously because according to record, many building managements failed to pay Syabas and caused supply to be cut and this is unfair to the residents who had settled water payments to the management every month,” he said in a statement today. “Syabas does not have the right and authority to force the building management to migrate from the bulk meter to individual meters because besides the government’s role, this process requires consensus among all the residents with the management,” he said. He said the migration process also faced many obstacles including the building management’s refusal to allow the residents to change to individual meters because they wanted to use water supply as security to force the residents to pay other management charges. Halem said Syabas could only encourage the building management to migrate from the bulk meter to individual meters. All applications to migrate must be made by the building management such as the joint management body, residents’ association and building management company. The form can be obtained at any Syabas offices. “Applications for individual meters can only be made after the application to migrate made by the building management has been approved by Syabas,” he said. Among the main approval terms was that the bulk meter holder had to settle the arrears first, he added. — Bernama

Friday April 17, 2009

The STAR online

By LIM CHIA YING

While the consumers rarely actually ask such questions, it is certainly the onus and responsibility of the food stall operators to conduct checks on the sources or suppliers.

However, this is not often the case, especially if they are small-time operators who are only concerned about purchasing the cheapest noodles from suppliers offering them competitive wholesale rates. They are not interested in how the noodles are processed, so long as they can get it cheap.

Such an attitude is surely most unfortunate and unethical as the quality of the noodles is dependent on the hygienic conditions in which it is produced.

The recent case of an illegal and unhygienic kuay teow-making cottage industry at Seri Kembangan in Selangor raided by the Subang Jaya Municipal Council (MPSJ) highlights the risk customers are exposed to when consuming such tainted noodles.

The Seri Kembangan house-factory was making kuay teow in very dreadful condition and supplying the noodles to various hawker stalls and outlets in the Klang Valley.

Last week, the MPSJ, acting on public complaints, raided the place which was a house converted into a noodle-making factory.

The health enforcement officers found the place filthy and unhygienic, with a broken ceiling next to the rusty and old kuay teow making machine and other equipment, which can cause toxicity in the food.

The MPSJ also discovered that the operator has no business licence.

The place was sealed by the MPSJ.

A bigger case involves a licensed food processing and supply factory, also in Seri Kembangan, which supplies frozen and Japanese food products to a whole list of major hotels, hypermarkets and its chains, and also popular eating outlets in Klang Valley.

On Tuesday, the factory was ordered to close under the Food Act 1983 which provides for a maximum 14-day closure order.

The order came after the Petaling district health office conducted the inspection on the factory and found certain conditions and guidelines had not been duly complied with.

MPSJ health officers and Selangor Islamic Religious Department (Jais) officers also took part in the operation.

In fact, the factory had been closed on April 6 by the MPSJ on the grounds that conditions of certain areas within the premises were unhygienic.

The MPSJ has found that the factory’s food processing kitchen and storage area were dirty and unhygienic while the safety of its workers was also not given due attention.

The MPSJ order for maximum closure is also 14 days, during which the factory operator has to clean up the place and improve on the various aspects and then write in to the council to ask for an inspection.

If the various health and hygienic requirements are found to be satisfactory and meet with the guidelines, the factory will be allowed to operate again. However, if they reopen without getting the council permission, the bylaw only allows for a maximum compound of RM1,000.

The factory operator had written in for an inspection, but before it could be conducted, officers suspected that it had already been operating although they had no concrete evidence.

A three-hour thorough inspection found that frozen products were strewn over the floor inside the frozen room area when they are supposed to be arranged on shelves.

A strong smell had emanated from the frozen room suggesting that there was food already past its expiry date. The officers even found some food dating way back to 2005.

Bottles and bottles of Japanese soy sauce which were stacked inside boxes and packets of curry paste and belacan inside freezers were also examined, but they contained no proper labelling to denote the ingredients.

The manager and workers were overheard telling the officers that they had taken supply from another supplier downtown.

A Jais officer commented that there was suspicion on whether the products were halal as there were no labels on ingredients.

Although the food processing area is said to have improved, the officers found one or two cockroaches scurrying near the utensil area while outside, a rat happened to dash down from the ceiling.

The workers who had previously not attended any food handling course, however, had certificates to show since the April 6 closure that they had undergone the course.

“After calculating the scorecard, we graded them 46%, which is still below the 50% mark required to open for business,” a Petaling district health officer said.

“We have advised the operator that some of their workers need to go for vaccinations, utensils have to be changed, products arranged properly, the expired goods need to be destroyed, and thorough cleaning has to be conducted,” he said.

“This is one way of educating the operator and we’ll monitor the factory operation jointly with the MPSJ so that this order is not disobeyed. I think the factory staff understood what we told them,” the officer said.

MPSJ health director Dr Abdul Rahim Ahmad said he was very serious about health and hygiene aspects of food-related businesses as a slight negligence by the operators can trigger a bout of food poisoning.

“We are getting the list from the operator of their supply outlets and the list may not exhaustive. Tests of food samples will be conducted at the lab, and while not wanting to create an unnecessary panic situation, we’ll write to the various outlets and their management about this,” Rahim said.

“Although some hotels do conduct their own auditing and health inspections, there is no guarantee as to who does and who does not. Also, some could receive their stocks from middlemen who repackage the items before delivering them,” he said.

“We hope to heighten the public’s awareness about their food consumption, and also hypermarkets or eating places to check up their supply sources as they have a responsibility towards consumers, and consumers have the right to know,” Rahim said.

Rahim added that tip-offs from the public were also very important in helping the department carry out its duties.

Meanwhile, in a latest update, the Petaling district health officer said the frozen food factory has called the office up for re-inspection, saying that it had done what was required, but the officer said he was awaiting a letter from the operator.