Loan shark alert
THE EDITOR, Sir:
Is there a regulatory body in Jamaica which supervises the numerous micro-financing/ lending institutions in Jamaica? After a very bad experience recently with a well-advertised company, I registered a complaint with the Consumer Affairs Commission. I received a timely follow-up call, but was told that such complaints do not fall under its portfolio. The officer was attentive and supportive as I vented my dissatisfaction with the company.
On checking the Financial Services Commission and Bank of Jamaica websites, there is no indication of either being responsible for these operations, hence my letter and, below, my experience:
On Tuesday, August 5, 2014, after hearing an ad on a community radio station, I walked into the Portmore office of the lending institution and applied for a loan of $60,000. On the application form, I wrote that I could repay $12,000 per month. On enquiring of their interest rates or repayment period, I was told this information would be made available during the interview.
I was presented with three loan-processing options: 1) $2,000 for five days, $3,000 for next day, and $4,000 for same day. I paid $3,000, but with the 'next day' being a public holiday, I returned on the Thursday for the interview.
This interview was basically someone sitting in front of me gathering as much data as possible, even information that was clearly stated on the application form. The person's justification was that the loans are unsecured, so they required all that data. I had no problem there. No information was given on interest rates/repayment period. I was told this would be provided when the loan is approved.
A PIPE DREAM
Next day being Friday, I was expecting the loan to take care of business on the weekend. That was a pipe dream, as there was no contact. When I called, I was told the data provided was being verified. I asked about the next-day service I had paid for, and was told that the next day was for the interview and not the turnaround time.
On Monday, August 11, after numerous calls to the office and no satisfactory update given on my loan application, I sent an email and received a response that the file was being processed. The next day, I received an email that a loan for $25,000 was approved. I visited the office said day and was told the loan was for three months. The interest rate was still not disclosed.
I requested that the period be extended to accommodate the amount I had requested and was told the file would be sent back to the directors for further review.
Up to Friday, August 15, I had to pay a third visit to the office as there was no information forthcoming after numerous calls and emails. Here is where it gets interesting: I was just told that $30,000 was approved to be repaid over five months at $12,000 per month! That's 100 per cent interest on a MEASLY $30,000!
So my conclusion: This is how they make their money - by collecting these 'processing' fees, then either turning down applicants or presenting them with such ridiculous offers. Where are the financial regulators in all this? How can these criminals be allowed to do business in this country? Something must be done - and FAST!