Banks warn of interest rise, delays as consumers celebrate
The Association of Banks in Fiji (ABIF) this morning expressed disappointment at the passage of the Fair Reporting of Credit Act through the Parliament yesterday.
ABIF Chairman, Kevin McCarthy said while the Bill “clears the slate” for many people, it also removed the good credit records of those vast majority of responsible borrowers.
MCCARTHY: “The inability now to be able to search a person’s credit history will greatly increase the risk levels within the personal lending market. Lenders will have little option but to increase interest rates to compensate for this increased risk.”
Mr McCarthy said borrowers in arrears had already contacted banks stating that if there was no Data Bureau, they see no need to pay back their loans.
MCCARTHY: “Banks will have no option but to pursue legal action through to bankruptcy to enforce payment of these loans…Processing times for loan approvals will now increase as banks ask borrowers to provide evidence of having paid off loans in the past. “
Mr McCarthy said the Act passed with zero consultation with stakeholders including the Data Bureau, Commercial Banks, Finance Companies, Hire Purchase & credit providers and with what appears to be no consultation with the proposed regulator, Reserve Bank of Fiji.
Consumer Council: New law gives consumers a clean slate
The Consumer Council of Fiji welcomed the passing of the Fair Reporting of Credit Act, saying the law would give consumers whose names were listed on Data Bureau database “a clean slate with no credit history”.
Council CEO Mrs Premila Kumar said: “After years of lobbying, finally consumers have won.”
KUMAR: “It is a joyous moment for consumers to start afresh. This means now they can access loan or buy goods on credit without being subjected to embarrassment and inconvenience.”
Mrs Kumar said aggrieved consumers had been bullied and blackmailed by Data Bureau and its members for some time.
KUMAR: “The Council has been intensely lobbying Government over the years to regulate Data Bureau so that there is a systematic way of collecting, disseminating and use of consumers’ private financial information.”
Mrs Kumar said the Data Bureau had been operating unfairly, under disclaimers such as “You must be aware that the information on your credit report is supplied by third parties. Therefore, the Credit Bureau will not be held liable for its inaccuracy”, thus not taking responsibility for their errors.
KUMAR: “We have been receiving complaints and concerns from some very frustrated consumers who are unable to access loan or purchase goods on credit. These consumers had raised their concerns that no financial institution was prepared to sanction their loan simply because their names appeared on the Data Bureau list.”
Since 2008 to date, the Council has received 47 complaints against Data Bureau. These claims against Data Bureau reflect “invasion of privacy, inaccurate information, listing of names for seven long years despite clearing the loan.”