OFFICIAL CAUTIONS CONSUMERS Consumers have been advised to be very careful and selective when shopping in the financial market to save themselves a lot of money and avoid being saddled with unnecessary debt caused by deceptive and unfair financial practices. Ms Gloria Molosiwa, a Commercial Officer in the Department of Trade and Consumer Affairs in Tsabong, recently warned consumers, especially those who borrow money from micro lenders and cash loans, to always read the blue print before signing agreements. She said most consumers end up trapped in debt and paying very high interest rates, while others are made to surrender their ATM cards, which is illegal. “Consumers must shop around for financial institutions that offer low interest rates and less stringent conditions. They should also check if the interest on their loan varies and whether they can afford the payments if the interest rate rises. That way they can avoid the debt trap,” said Ms Molosiwa. She further advised consumers to always opt for short term loans as they end up paying less than those who opt for longer payment periods. She said by opting for shorter payment periods, consumers will not have to deal with the pressure of paying off a debt over a long time. Furthemore, Ms Molosiwa urged consumes to always make sure that they can afford to pay the monthly installments and still live comfortably. She noted that interest rates only inform consumers about the cost of the debt but not about the regular payments. She said consumers must ask themselves if they can be able to honor their debt even if their circumstances change. “The interest rate does not include extra costs that will accrue when things go wrong, like charges for late or missed payments. You must always remember that you can renegotiate the terms of payment if your financial situation changes,” said Ms molosiwa. She further advised consumers never to surrender their ATM cards as those are their personal property that must not be shared. She urged them to refuse to surrender their ATM cards to micro lenders as security for their loans. She reminded consumers that they have rights when accessing financial services in banks, insurance companies, pension funds and micro-credit schemes. However, Ms Molosiwa reminded consumers that they also have responsibilities that they have to fulfill. She said such responsibilities are meant to hold consumers accountable for their actions. Consumers were also encouraged to research and gather information about financial institutions and the services that they offer. “Consumers should be given all the relevant information about these products, including fees, charges, length of contract and penalties so that they make informed decisions. They will also use the information to choose a product or service that best suits their needs,” she said. She also reminded consumers that they have the right to receive fair settlement in case the product or service does not satisfy their needs, adding that there should always be a platform for consumers to raise complaints with the service provider through formal channels. She reminded consumers that they have the right to be given information about all the transactions regarding the product or service they have acquired such as loan statements, bank statements and others. “Consumers must read and understand the terms and conditions of the contract before signing to avoid misunderstandings and misinterpretation. Once they have signed, they must abide by the terms and conditions of the contract,” she said. BOPA
Posted on: Mon, 17 Mar 2014 11:30:32 +0000
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