Personal stories
This section tells the stories of real consumers who have
suffered as a result of failures in financial consumer protection. If you have
stories like these about consumers of financial services in your country,
please send them to campaigns@consint.org.
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Tanzania
Mrs Iyaoneni Miraji is a 29-year-old mother of two who lives in
Vianzi Village, Mkuranga District. When she took out a loan earlier
this year, she did not expect that a few months later she would be
divorced, and deprived of the livelihood she depended on to support
her two children. Mrs Miraji told her story to the
Tanzania Consumer Advocacy Society (TCAS), a Consumers International (CI) member
organisation.
"I had been living with my husband since 2009 in a seriously poor
economic condition, with not enough income to support our family.
In 2011, we decided to take out a loan worth TZS50,000 to start our
own business selling snacks. We found a microfinance institution
who agreed to lend us the money as long as we offered a security
worth more than TZS50,000. My husband agreed to offer our bed,
which was worth TZS90,000. I was supposed to repay my debt over six
months at TZS3,000 a week. Unfortunately, after the sixth week my
son was taken ill with malaria, which stopped me doing business. My
husband was not supportive, so I decided to go back to the village
where my parents live as at least they could help me.
While I was there, I missed four loan instalments worth a
total of TZS12,000. The lender decided to take the bed we had
offered as security against the loan, but my husband resisted and
instead directed them to my parent's village. When they arrived, I
tried to explain the situation to them but they still threatened to
take me to the police station. In the end, my mother had to sell
her plot of land to cover the debt.
Because I had cleared a portion of my debt already, asked
the lender to calculate the outstanding balance that needed to be
repaid. Instead, they refused and took the entire loan amount,
telling me it included a 'disturbance fee'. Now my mother has lost
all of her land, which was actually worth more than the original
loan amount.
As a result of what happened, my husband prepared a divorce
letter. He has since disappeared, leaving me with two children to
support. I rely for everything on my parents, who themselves have
no land for farming.
I am discouraged to continue dealing with microfinance
institutions; they do not understand their clients' social and
economic problems. Days differ when doing business, there are times
when we do get a lot of profits but sometimes we make a loss. And
social problems may occur, like what happened to me, but lenders do
not take this into consideration. Now, I have organised my fellows
to establish our own village community bank.
The government through regulators should control the
activities of financial institutions. People can become victims if
they do not understand loan contracts. Our rights and obligations
are not explained by lenders, we are just told 'you should pay
this, if not we shall do that'…we are totally confused! It is
important for people to be empowered through financial education
before taking loans."
Consumers
International's other work in Africa.
Hong
Kong
Following a spate of shop closures, the
Hong Kong Consumer Council (HKCC) began receiving increasing
numbers of complaints from credit-card consumers, who found
themselves forced to pay in full for goods and services that they
never received.
In one such case, "Miss Lee" (not her real name) signed a
contract for a three-year membership to a yoga club. Under a
credit-card instalment plan, her membership payments would be taken
from her credit card in instalments. According to the contract, the
plan would be ceased in the event that the company closed down. As
it happened, the yoga club did indeed close down one year after
Miss Lee joined. When she called her bank to stop the membership
payments, her request was denied on the grounds that the entire
transaction amount had been advanced to the yoga club in accordance
with the provisions set out in the instalment plan, and Miss Lee
was liable to pay for two more years of membership to a yoga club
that no longer existed.
Miss Lee's story illustrates a serious problem for many
consumers in Hong Kong who agreed to pay for goods and services by
instalments from their credit cards without realising that in doing
so they were entering into a loan agreement with their credit-card
company. Many did not realise that they were exposed to the risk
that if the company went bankrupt they would still be liable to
settle the debt. The financial regulator recently issued new
guidelines to enhance transparency in the sale of credit-card
plans. HKCC hopes that this will go some way in ensuring that
consumers fully understand what they are signing up to in the
future.
Consumers International's
other work in Asia.
Chile
Camilo Barraza is perilously close to losing his home. When he
was made redundant from his job a few years ago, Camilo began
having difficulty in making his monthly mortgage repayments.
He was sued by the lender, who also sold his debt on to another
bank. For the past two years, Camilo has been making his
repayments, including high interest charges and other fees - yet
the original lender did not cease the legal proceedings.
His case was taken up by the legal defence team at
ODECU, a CI member organisation in Chile, who convinced a court
to temporarily suspend proceedings. But Camillo's future is still
far from certain as a legal loophole means that the bank is still
within its rights to repossess his house - even though he is now
making his payments every month.
Consumers
International's other work in Latin America.
USA
"I
found a notice on the door that said the property was in
foreclosure. I didn't know what to do." - Eloise Grant
Eloise Grant is 67 years old. Until recently, she resided in a
home she rented in Elk Grove, California. Shortly before
Thanksgiving in 2008, Mrs Grant was surprised to find a notice
posted on the outside of her home. The notice said the house she
was renting was in foreclosure and would soon be sold. Mrs Grant
said she always paid her rent and her landlord had never told her
there was a problem. She said she called the number listed on the
notice, and the person with whom she spoke told her that she had
better move her things out of the house because she might find all
of her belongings on the sidewalk after the sale. Frightened and
confused, Mrs Grant did everything she could to keep life as normal
as possible for her household even though she knew she would have
to move soon.
Mrs Grant's home was the family gathering place for her adult
children and many grandchildren. She wanted to find an affordable
home in the same Elk Grove community so that the children in her
care would not have to change schools and move away from their
friends. While shouldering the burden of finding a solution, Mrs
Grant said that her hair began to fall out and she unconsciously
held her breath on many occasions.
After much searching, Mrs Grant was unable to find suitable
rental housing until her niece offered her home in Sacramento,
California. She moved to Sacramento shortly after the Christmas
holiday, where the children under her care now attend school.
More on
Consumers International's Fair Financial Services campaign.