KUALA LUMPUR: Three Acts of Parliament in consumer credit have weak regulatory laws that compromise the interest of consumers, according to a working paper at an international conference held here.
Domestic Trade and Consumer Affairs Ministry officer K.L. Yap, who presented the paper on consumer credit yesterday, singled out the Money Lenders Act 1951, the Pawn Brokers Act 1972 and the Hire Purchase Act 1967.
“Consumers are disadvantaged due to either lack of regulatory legislation or weak laws which worked against consumers. It is difficult for the ministry as well as other relevant organisations to monitor money lending activities to curb possible abuses because the Money Lenders Act 1951 only provided the police with powers to enforce,” he said at the Asian Conference on Consumer Protection, Competition Policy and Law.
About 100 participants from 21 countries attended the conference, which re-examined issues pertinent to contemporary consumerism.
Yap said weaknesses in the legislation allowed unscrupulous moneylenders to manipulate activities for their own benefit and at the expense of borrowers.
As for the Pawn Brokers Act 1972, he said, the Act allowed for interest to be charged at 2% per month even though loans given out were secured by collaterals of value about three to four times higher than that of the borrowed amount.
He said the Act stipulated that only 25% of the value of pawned items needed to be reimbursed in the event of a theft, robbery or fire.
Yap also pointed out that no provisions were made for the weight and measurements of the pawned items to be recorded in the pawn receipt given out to the borrower.
“Those buying products under the hire purchase scheme often complained about having to pay repossession and storage fees if the item was repossessed in the event the borrower defaulted in payment,” he said.
Yap pointed out that the fees were varied and totally beyond the control of the borrower as the Hire Purchase Act 1967 failed to protect the consumer in this area.
Other speakers at the two-day conference included those from Consumers International, United Nations Conference on Trade and Development, Australian Competition and Consumer Commission, Consumers Affairs Ministry New Zealand, Monopoly Commission of Pakistan and Hong Kong Consumer Council.