Friday, 12 July 2013

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

My car got hit by some guy who had insured his car but mine is not so his 3rd party insurance covered the damage to my car. They told us to get 3 quotes from different garages and we brought them. The garage they chose told us to leave our car at their garage last week. The insurance gave us a cheque of P13,000 and the garage told us to transfer the money so that they can start fixing the car. Then we asked how do we pay when the car is not done but they said the money to fix the car is theirs to use it to fix the car. We said how can the money be yours when the cheque was written our name they said sometimes they deal straight with insurance its just that they trusted us to pay them the money. We then asked them they provide us with receipts for us to know how much was spent on fixing the car but they said no that is not possible we are not suppose to know that. How can you not know how much was spent on your car? We feel something is not right here and we need your help to find out if they were right or there is foul play. We also feel the money is too much for fixing the car.

I share your suspicions. What are the garage trying to hide? Why don’t they want to know what they’re up to?

Don’t forget that you are the customer here, it’s your money that’s being used to repair the car, money the insurance company paid you to do exactly that. You have a right to know how the money is being spent.

Nevertheless we spoke to the garage and for whatever reason they now say that of course you can see the invoice they produce for the repairs they’re doing, no problem at all. Don’t forget to ask for it and check it to make sure it’s reasonable and correct.

Dear Consumer’s Voice #2
Pliz i need ur help. I took P1,000 loan from somebody at 20% interest. The first month I paid P200 then I failed to pay for 4 months. Then I paid P2,000 believing that the loan will be settled. Now she is saying I still owe P1,500.

Something is clearly wrong here. In fact several things are wrong. I’ve done the maths.

Firstly if the loan was P1,000 and interest rate was 20%, then the interest in the first month would have been P200. In that first month you just paid off the interest and you still owed P1,000. Not a good start. You should have been paying twice or three times that amount to pay off your debt.

If you paid nothing for the next 4 months I calculate that you would then have owed a total of P2,074 at the beginning of the 6th month, assuming that the interest was compounded each month. When you paid P2,000 you would then have owed either P74 or P488 depending on whether the interest for the sixth month had been applied yet.

The big issue is when this all happened. If you owed a balance of P488 six months ago that would have compounded since and you would now have build up a debt of about P1,500. Is that what happened?

However the most important question is whether this lender was registered with NBFIRA?

You might have heard about the “in duplum” rule. This says that at the time a debt is settled, the amount of interest cannot exceed the capital amount hat’s outstanding. The bad news is that you might really still owe the P1,000 you borrowed and all you’ve paid so far is interest. However the “in duplum” rule says the most interest you can be forced to pay is another P1,000.

Send me the name of the lender and we’ll see if they understand all this!

Update: I heard from the reader that the woman who lent him the money is NOT registered with NBFIRA. I suggested that he pay her nothing and complain to NBFIRA. She’s earned enough from him already, now she’s earned a meeting with the regulator!

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