Sunday 7 August 2022

The Voice - Consumer's Voice

Can they charge me so much?

I'm kindly asking for your advice. I owe someone P1,500 motshelo money. When returning back the money is it possible for the person to say I owe them P6,000. Looking at the duplum law rule. Shouldn't I be paying P3,000.

Thank you.

I think you know your rights already!

The in duplum rule is something understood and enforced in many countries including our own and it's quite simple. To quote a highly respected judge (one of ours) in a judgment passed in 2008, the rule "serves to aid debtors in financial difficulties by holding that it is unlawful to recover interest equal to or more than the capital sum upon which interest had accrued". Later in the judgment the judge also said that "the application of the in duplum rule cannot be waived".

In simple terms, the in duplum rule is law and there's no way around it. If the person running this motshelo scheme wants their money back, they're entitled to demand it form you including interest but the interest cannot be more than the P1,500 capital you owe. So you're right, they can't demand more than P1,499 in interest payments.

I think you should also approach NBFIRA, the Non-Bank Financial Institutions Regulatory Authority and get their advice and ask them to examine this scheme. Depending on the setup of the scheme, they might be able to give you some advice and assistance.

The simple truth is that you can't avoid paying your debts. They don't go away and they can damage your finances for the rest of your life if you're not careful. However, the Consumer Protection Act offers consumers protection from lenders using "force, coercion, undue influence, pressure, duress, harassment, unfair tactics". They must recover their debt in a reasonable manner and charge only what the law allows them to charge.

If this person refuses to see sense, I'm happy to contact them for you and explain all this to them.

Will they pay us?

My brother is late we buried him this month. He insured himself and we proceeded with the claim and they promised that it will take 24 hours. We waited and waited until I phoned them and they said that the policy has been deactivated last year August but the owner has been paying until the last month, they didn't communicate with him telling him that the policy has lapsed. They took the money even after August.

They said he missed some months in different years and they didn't communicate as they are supposed to do. I went to the post office were the claim was processed and they were surprised because they didn't tell them as they do in all policies, when someone missed payments they inform them to tell the person to pay outstanding balance but with this one they didn't.

I know that some companies insist that it's entirely the responsibility of a customer to make sure that monthly instalments are made, whether it's insurance, hire purchase or a bank loan. I understand that. However, it's 2022 and don't they have our cellphone numbers and email addresses? Don't large companies have expensive computer systems that can be set to send out messages when the payments they expect aren't made? Is that too much to ask for? I don't think so. They're making enough money from us that I think they can afford to ask their IT people to help us all out.

However, that all depends on us keeping them informed if we change our contact details.

The lesson here is that we can't always rely on banks, insurance companies and hire purchase stores to let us know if there's a problem with our payments. Yes they should be telling us but we know they can't be relied upon to do so.

Update: I contacted the insurance company and they responded extremely quickly, saying they would look into the situation urgently. I then heard from the reader who said the insurance company had already been in touch, apologising and promising to make the payment the following day.

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