KUALA LUMPUR: Financial institutions should treat borrowers who default on their hire purchase loans more fairly, said Federation of Malaysian Consumer Associations (Fomca) secretary-general Muhammad
Sha'ani Abdullah.

He said they should hold discussions with problematic borrowers first and not resort to repossessing their vehicles which only further burdened them.

"In the first place, the banks had deemed they qualified for the loans, and as such, should also take the trouble to help them when they encounter difficulties (in servicing their loans). Allow them to schedule payments for any arrears and do not be to hard and demand for all outstanding arrears to be settled in on go," he told Bernama here today.

He was commenting on the government's plan to amend the Hire Purchase Act to make financial institutions get the court's consent to reposses vehicles.

Muhammad Sha'ani added that Fomca welcomed the move to amend the act but felt that the matter must be carefully studied so that it provided win-win solutions for both the lender and borrower. -- BERNAMA