Cardholders complain most on hiring of inhumane debt collectors

JAKARTA (JP): Some of you may have had wonderful experiences since getting your first credit card. You get bonuses or discounts when you use the cards in purchasing various items.

Some of you may also have had other "wonderful" things happen, such as double or triple billing charge statements, misscalculation and facing inhumane debt collectors.

The number of credit-card holders in Indonesia has increased significantly in recent years. Visa International, the world's leading credit-card brand, for instance, booked 4.3 million cards in the country as at the end of June, 2001.

The growth, however, is also followed by continuous complaints from credit-card holders.

An executive at the Indonesia Consumer Foundation (YLKI) Donny Lanazura told The Jakarta Post that there were always complaints from credit-card holders.

"Most of the complaints focus on the issuers, merchants and transactions or billing statements," he said.

Indeed, many local newspapers regularly publish statements from banks (credit-card issuers), apologizing for unfriendly practices by their staff, saying that they never meant to terrorize their subscribers by sending debt collectors, for instance.

Just as an example, a reply from the head of a bank's customer relations department in a readers's column of a daily newspaper in Jakarta reads, "We settled the complaint long before the customer sent the letter to this paper. We have always tried to improve our services, blah blah blah."

Well, that could be another gimmick from the issuer to maintain its image because who wants to be blamed for bad services?

A head of customer service at a private bank admitted that such cases also occurred at his bank. "It's common that a customer sends a letter to a newspaper which is published after the problems had already been settled," he said.

As seen from the "letters to the editors" of some leading newspapers in the country, many people complain about some banks or credit-card issuers for poor services and information.

In accordance with Donny's statement, most of the complaints in the media relate to fantastic interest rates, uncivilized debt collectors, sophisticated bureaucratic, unfriendly customer service personnel, puzzling unanswered telephone calls and impolite promoting/marketing measures.

Donny said it was understandable if banks try to get as many new customers as possible. "But they should also be very selective in getting new customers. For instance, they should really know the monthly salaries or income of the prospective credit-card holders, otherwise problems in billing will occur."

On the other hand, customers should also be very careful in selecting credit-card, studying carefully the offered interest rates and credit limit.

"There have been many complaints that some credit-card issuers offer free joining or membership fees, but at the same time they raise the interest rates without a formal notification to the customers," he said.

When the customers find out the conditions and refuse to pay the monthly charge, the issuers then send debt collectors. "Sometimes a issuer can hire more than one debt collector from different parties and each of them forced the debt-ridden customers to pay by different methods," he said.

He said such incidents have happened, as there were no firm directions from the government.

"In the case of interest rates, for example, the central bank, Bank Indonesia, should set a range of figures, so that credit- card issuers cannot set whatever they based on their own interests," he said.

He said there should also be a ruling to regulate the use of debt collectors in dealing the bad credit-card payment.

Problems

Complaints usually occur due to the cardholders' poor knowledge in using their credit cards. But many merchants also have limited facilities to serve credit-card holders. It's very common in Indonesia that customers are forced to pay a surcharge of about 3 percent when using credit cards. Another problem that also arises is that some tellers do not even know the difference between debit cards and credit cards.

Potential problems beyond the credit card services control is loss or theft.

Helen, an Indonesian working in Britain, said that she was on vacation in Jakarta a couple of months ago when her credit-card issuer called her from London.

"A staffer at the bank wanted to confirm whether I was in Hong Kong and had used my credit card in a jewelry store. I said no as I was never in Hong Kong. To my surprise, the staffer said that someone in Hong Kong was using my credit card, which I had not lost," she said.

She learned later that credit cards were easily cloned for crimes.

"Fortunately I got a very good bank which wanted confirmation from me for the purchase I never made," she said.

Collection?

In this changing world, more people are fond of using practical things. When cash is considered to be easily stolen, a credit card is regarded as more secure as it uses signatures and/ or pictures.

With more and more people carrying credit cards, banks and the issuers are being criticized as they are providing tempting offers of credit that could encourage consumerism and draw more people into debt-related troubles.

While it might be true that some people tend to have a snobbish attitude, that they do not really comprehend how banks work and they can be lured into debt by the easy way to obtain loans,in the end, they are left tearing their hair out trying to meet the installments..

Donny said that when someone falls behind in his or her repayments over a long period, most creditors most likely have to deal with debt collectors and that delinquent repayments will cause bad credit reports later.

People should really know what kind of credit card they can hold or control. Otherwise, they will have troubles instead of services. This is what should be improved by the issuers; detailed information, not only promotion and marketing, he said.

People should also remember what kind of cardholder they are. Do they tends to pay off the entire balance at the end of every month? Or are they likely to make only minimal payments?

Those who want to pay the entire balance at the end of each month will not need a card with a low interest rate because they probably won't have to pay any finance charges anyway. Instead, search out credit-card companies that charge no or very low annual fees.

Those tending to carry an outstanding balance on their credit card from month to month, look for card issuers who charge low interest rates.

So be smart in selecting and using those thin plastic cards. Hopefully they can be really wonderful and offer many wonders, but don't make them your life as they can become problems. (I. Christianto)