'Scammed' by the banks

THE EDITOR, Sir:

Here, there, and everywhere, scams proliferate. Some are legal and some criminal. I was reading a United States-based business newspaper which points out that many brokerages use Ponzi schemes to pay their clients, meantime hoping for a change in markets which will alleviate their positions.

In Jamaica, all banks operate a 'credit card' line of credit, for their clients, sometimes in millions of dollars. The problem is they charge 18 per cent per annum for US charges unpaid after 30 days, and 44.5 per cent (some 49.5 per cent) on Jamaican-dollar credit. Why is there a disparity?

Should you charge US$100 on your card, your carrying charge will be 18 per cent, US$18 or (rate 90JMD to 1USD) J$1,620. Should you charge in Jamaican dollars, it becomes 44.5x 90.00 = J$4,005, a difference of $2,385, an increase of 147 per cent.

Why is this so? The bank will say the risk is greater. What risk? There is none that warrants an increase of 147 per cent; our exchange rate has not diminished severely in the past three years; on the contrary, it has revalued at intervals.

What else can be a reason? Collateral? The unsecured credit card becomes the status of an unsecured loan, which implies that a default of payment may have to be sued in court, or given to a collection agency. But so would a secured loan, whose terms have been abrogated, and unsecured loans, and all other contracts with s bank.

Charges? Well, the bank adds its collection charges to the debt, which you have to pay to an abusive and demanding bailiff.

Regrettably, I cannot see a reason for these charges, and will ask some knowledgeable person, preferably a banker, to otherwise explain. Failing which, I would be obliged to ask my bankers to refund at least two years of overpaid interest previously debited to my account.

R.K. SUJANANI

rsujanani78@gmail.com