GEORGE TOWN: The Consumers’ Association of Penang (CAP) has welcomed the government’s move to introduce a new law to protect those taking loans.
CAP acting president Mohideen Abdul Kader said the Consumer Credit Act (CCA) will help consumers understand the terms of the loans.
He said one way to accomplish this is by simplifying agreements and using layman’s language.
“Many consumers are unable to understand the legal jargon of the agreements that they sign with banks and other financial institutions and this gets them into trouble in the long run,” he said.
“It is vital that any loan agreement be worded in layman terms so that consumers’ are able to understand it and know what they are getting themselves into beforehand.”
Yesterday, Prime Minister Dr Mahathir Mohamad said the CCA would ensure consumers are fairly treated when dealing with creditors or loan providers and at the same time, encourage prudent spending.
Mahathir said many borrowers faced problems repaying their loans.
He said Malaysia’s household debt stood at 82.1%, higher than Italy (40.3%), Japan (58.1%) and the United States, 76.3%.