Saturday, 22 July 2017

The Voice - Consumer's Voice

Why is it so much?

Good Morning Mr Harriman, I need help. I got a loan from a microlender, it was P3000. I have paid it for about six months in instalments of P220, but last month I wanted to top up to P16000 and before the loan was credited someone bought my plot and now I had the money I wanted. I went back to try and stop the loan but they said it was too late so from the P16000 they credited me P12000 and cleared the amount I owed before.

Right now I wanted to clear it but they are telling me the settlement amount is P21000. I don’t know maths, I wanted to know if I was credited P12000, why is the settlement that much or there is something that I don’t understand.

They said its that much because I did not even pay one instalment from the top up that I tried so much to stop. Please help me understand. Thank you.

Yes, this does sound outrageous but I suspect it’s legitimate, if that’s the right word for such an abusive, exploitative and wicked loan.

The only limit that the law currently applies to loans is the so-called “in duplum” rule which says that when a debt is settled, the interest cannot be greater than the capital amount outstanding. In your case you borrowed P12,000 (after they repaid your former loan) so the maximum possible settle amount could be P24,000 and they’re below that, even if only slightly.

Your problem is that when you signed the second loan agreement you committed yourself for the duration of the loan and also to their terms and conditions that presumably said that could charge an enormous settlement fee if they felt like it. Think about it from their point of view. They were eagerly anticipating all those lovely, lucrative monthly repayments that they could spend on beer, cigarettes and parties. By trying to cancel the loan you came close to losing them that money and they wanted compensation for that.

This is a good example of why we urgently need a right to a cooling off period whenever we take any loan, whether it’s from a bank, furniture store or micro-lender. And we need it now.

Is Helping Hands worth joining?

I was approached by a friend who told me that I should join Helping Hands and can make money. Is this true?

Helping Hands International is a pyramid scheme. The people marketing the scheme describe it as a “non governmental organization” attempting to “empower the less privileged people and orphanage homes”. They also claim that joining the scheme will offer “passive income”, new cars, laptops, a “house of your own”, free trips abroad, loans of up to P500,000, scholarships and “residual income for life” but none of this is true.

Unlike Multi-Level Marketing schemes like Amway and Herbalife, this scam has no products and the business model is entirely based on recruiting people beneath you and them recruiting people beneath them with the promise of money magically flowing up the pyramid in your direction. That’s a pyramid scheme.

I had a WhatsApp conversation with someone selling Helping Hands recently and I asked him “So you earn money by recruiting other people? I don't have to sell anything, just recruit more people?”. His answer was simple. “Yes Sir”.

They’re also liars. Their advertisements claim that they are “in partnership with Bill Gate Foundation, Hyundai Motors, Apple Corporation, HP” but in reality, there are no such partnerships.

So in summary, this is nothing more than a pyramid scheme run by people who tell lies. Like all pyramid schemes Helping Hands International will eventually collapse, leaving its victims disappointed, embarrassed and poorer. Do you really want to be a victim? Please warn your friend and anyone else they might have tried to recruit. Spread the word and help protect them!

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