Credit, hire purchase reports launched
Key points from reports
- Annually hire purchase companies manage a credit business of $57m per year of which credit charges alone account for $25.5m annually.
- 31 per cent of hire purchase buyers are below 35 years and 36 per cent are in the age group from 35 to 45 years.
- Significant consumer illiteracy on the functioning of the hire purchase system. This is largely on account of lack of clear information given to consumers by hire purchase companies.
- Confusions on warranties, extended warranties and insurance also abound in the hire purchase industry.
The Attorney-General and acting Prime Minister, Aiyaz Sayed-Khaiyum at the launch of the two Consumer Council reports in Suva yesterday. Photo: RAMA
By ELLEN STOLZ
In a bid to ensure better laws and enforcement mechanisms for consumers taking loans, the Consumer Council of Fiji yesterday launched two reports on this.
The launch was officiated by the Attorney-General and acting Prime Minister, Aiyaz Sayed-Khaiyum.
The report, ‘Hire Purchase Industry in Fiji’ critically analyses the practices in the hire purchase market while the ‘Review of Consumer Credit Act 1999: from Consumers perspective’ analyses the Consumer Credit Act of 1999 and addresses consumer complaints.
Mr Sayed-Khaiyum said: “The idea is that with these laws, you need to continuously look at the loopholes and improve them given the changing circumstances of society.”
He said Government’s role was to manage the power differences of hire purchase providers.
“Credit is a personal issue which is always riddled with emotions,” he said.
The Bainimarama Government looks at two sections of credit industry – credit by Bank and the hire purchase industry. He stressed this was important as the higher purchase industry was utilised by those people predominantly at the lower end of the social economic scale.
“This is because these people do not have high levels of capital to buy a fridge or a set of furniture.”
Mr Sayed-Khaiyum has assured the Consumer Council that Government on its part would keenly study the two reports and hoped to implement some of the recommendations in respect to consumer protection.
Consumer Council chief executive Premila Kumar said this was the first in-depth investigation looking at the plight of consumers and their rights available under the Consumer Credit Act.
“These two reports make some eye-brow raising and interesting revelations into the hire purchase industry,” she said.
“They look into the plight of consumers and the rights available under the Consumer Credit Act.
“The reports also focus on the existing systemic problems and unethical practices faced by consumers. It also caters the comments of the consumers in regards to the hire purchase industry,” Ms Kumar said.
The reports were funded by AusAID and compiled by Dr Ganeshwar Chand and Ram Karan.
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