|A transaction office of Agribank
According to the SBV, credit institutions must strictly comply with previous legal documents on civil loans and credit card issuance, especially those on credit interest rates surcharges, calculation methods and transparency.
This means these institutions must make public their lending activities, such as standardised contracts listing, providing clients with information on lending rates, as well as establishing concrete interest rates determinants, including adjusted rates, overdue rates and other extra charges, before finalising a loan agreement.
Regarding consumer finance companies, the SBV is working on promulgating more in-depth regulations on uniform loan interest rates across the entire market to prevent fraudulent lending.
The SBV also ordered credit institutions to tighten credit control, by timely detecting malpractice and strictly handling violations of consumer lending regulations to protect customers’ interests.
Previously, the SBV’s Banking Supervision Agency (BSA) announced an annual inspection of well-known lending institution VPBank Finance Company Limited’s FE Credit brand (FE Credit) in 2018, after more than 100 consumer complaints were filed against the company.
In response to a written notice from the Vietnam Competition and Consumer Rights Protection Agency, under the Ministry of Industry and Trade, regarding FE Credit’s recent negative feedback, the BSA said it will review the lending firms’ operation.
The complaints focused primarily on malpractice in FE Credit’s customer service, such as shady loan transactions and verbal harassment towards consumers from staff working in the debt recovery department in 2017 and the first quarter of 2018.
The BSA also said that FE Credit’s process for consulting and finalising consumer loans has many issues, such as automatically filling contracts without customers’ agreement or too fast approval times with no guarantee of legal value.
In addition, the company does not allow consumers to correct information on their contracts even when they have detected errors, creating anxiety and affecting the financial situation of a large number of consumers, said the BSA.
Nonetheless, the inspection on FE Credit is a periodic plan already announced by the SBV at the end of 2017, ensuring financial protection for credit institutions depositors and customers.