Credit card users need protection<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The credit card industry has recorded strong growth over the past
\nseveral years. But the industry has apparently failed to provide
\nadequate protection for consumers. This week's Sunday Post
\nhighlights this issue.<\/p>\n
At the end of every month, Budi, 30, who works for a finance
\ncompany in the Jakarta Stock Exchange building, hurriedly tears
\nopen envelopes containing bills and peeps at the amounts owing
\nwith a racing heartbeat.<\/p>\n
\"I have four credit cards I regularly use. Some bills are no
\nsurprise since I estimate the amount owing beforehand, but I have
\nreceived a shock many times at the mammoth amounts I have to
\npay,\" Budi said.<\/p>\n
He added that he intended to cut the cards up and start paying
\nin cash to put an end to the headache.<\/p>\n
\"My credit cards simply ruin my cash flow and financial
\nplanning,\" he grumbled.<\/p>\n
Budi is not alone. Ria, 25, not her real name, is a secretary
\nfor a private company in Kuningan, South Jakarta, and has had the
\nfrightening, not to mention embarrassing, experience of hostile
\nmen arriving at her office demanding she pay her debts.<\/p>\n
\"Fortunately, a friend of mine came to help me. The men left
\nafter we gave them 'transportation money' of Rp 100,000. At least
\nI have a month to settle my debt before they come again should I
\nfail to settle the bill,\" she said.<\/p>\n
Complaints have soared in the credit card business over
\nthe past three years in tandem with the aggressive marketing
\nefforts by banks to lure new customers.<\/p>\n
Non-governmental organization Indonesian Consumers Foundation
\n(YLKI) received 85 credit card-related complaints during the past
\nthree years, ranging from the use of thugs for debt collection,
\ncredit card fraud, incorrect billing, credit card renewal without
\nthe customer's consent, failure to record payments, etc. In the
\nfirst month of the three-month complaint program with the central
\nbank, YLKI received an additional 220 complaints.<\/p>\n
\"The business is getting out of hand, with aggressive
\nmarketing ploys by the issuers coupled with easier application
\nprocedures, which sometimes ignore prudent banking practices,\"
\nsaid YLKI chairperson Indah Suksmaningsih.<\/p>\n
Late last year, or 10 years after the credit card business
\nfirst entered the market and started booking 10 million to 12
\nmillion transactions worth Rp 30 trillion a year, the central
\nbank issued a regulation to monitor the use and issuance of
\ncredit cards.<\/p>\n
\"Credit card issuers are obliged to exercise risk management
\nto minimize risks in credit card issuance,\" said a senior
\nofficial with the central bank, Dyah NK Makhijani, recently.<\/p>\n
Dyah said the central bank also required issuers to have an
\ninternal system to detect and anticipate possible misuse of
\npersonal data of customers amid the rampant practice of credit
\ncard fraud involving the staff of issuing companies.<\/p>\n
Unfortunately, the central bank regulation does not offer
\ncustomer protection, which has become a major source of
\ncomplaints, like the use of violence in debt collection.<\/p>\n
The head of a credit card division at one local bank who
\nrequested anonymity said the use of debt collectors was common
\npractice in the banking industry.<\/p>\n
\"We admit that debt collectors sometimes go too far, and we
\nhave tried to tell them, but sometimes it is the debtors
\nthemselves who leave us with no other option,\" he said.<\/p>\n
Meanwhile, Hongkong Shanghai Banking Corporation Limited
\n(HSBC) Indonesia's head of marketing, Ichsan Tobing, said each
\nbank had its own policy in the matter.<\/p>\n
\"HSBC itself is conservative in the business, relying mainly
\non its solid reputation and strong services to attract new
\ncustomers. We strictly screen every credit card applicant for
\ntheir age and annual income before approving their applications,\"
\nhe asserted.<\/p>\n
\"It's business we're talking about, so we have to explore
\nevery avenue to net new customers,\" he added.<\/p>\n
Despite the serious consumer protection problems, the credit
\ncard industry will continue to grow strongly.<\/p>\n
Some issuers predict that the number of credit card users will
\nrise by 20 percent this year, thanks to easier application
\nprocedures.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/credit-card-users-need-protection-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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