Plain Speaking - By Yap Leng Kuen
THE heat is on from various experiences of consumers, it looks like banks are determined to follow the prudential lending guidelines set about two months ago.
Or rather, they are faithfully following the guidelines that were handed to them after prior consultations.
Consider this experience of applying for a credit card.
Not only was the payslip required, bank and Employees Provident Fund statements were also requested for.
The message is “this (controlling of household debt) is serious business.”
It is not just the new applicants who come under the spotlight. Existing cardholders with cards approved prior to April 1 , 2011 have to submit their latest income documents to help card issuers determine credit limit and permitted number of cards held per customer.
Household debt stands at above 75% of gross domestic product, an issue of concern for many.
Besides a person's affordability, loan and credit card applications are also scrutinised based on the number of loans already taken, tenure of repayment and sources of income.
In cases when the salary falls short of the required amount, other sources of income will be crucial to determine the level of affordability.
Many customers do understand the implication of this high percentage especially in the wake of the 2008 subprime housing loan debacle in the United States.
However, the need for more personal information has brought about a sense of dismay among consumers who are not used to divulging so much information to strangers.
No doubt, looking at the statistics, one can understand why such prudential and pre-emptive measures need to be taken.
On the personal level, one may not relish the idea of parting with so many details of one's finances.
It is timely for some form of reassurance and commitment of confidentiality of customer information.
This pledge of confidentiality is already present in the documents but it is time to reiterate the pledge in a strong and effective manner.
With the high frequency of crank calls relating to one's financial situation, customers have become increasingly wary of parting with personal information.
Consider this real life encounter.
“Hello, this is inspector so-and-so from police headquarters,'' said the caller who didn't seem to know English but had personal details of the recipient of the call.
For instance, he had the correct identity card number and even challenged the recipient to recall who he could have given his details to recently.
Running through the recipient's mind were places that he could have gone and given a lot of information to the bank, retail stores, lifestyle outlets ...
What seems to be the divulging of a simple piece of data, said to be necessary for background and profiling, can turn out to be a nightmare.
Information that falls on the wrong hands can be manipulated!
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