​Vietnam’s consumer finance company faces inspection for harassing customers

FE Credit will be inspected by a State Bank of Vietnam unit

A personal finance agent from FE Credit talks to a customer about its loan product. Photo: Tuoi Tre

A Vietnamese consumer finance firm braces itself for an inspection from a state agency following a series of consumer complaints about the company.

Local consumer loan company FE Credit will face an inspection by the State Bank of Vietnam Banking Supervision Agency in 2018 regarding harassing customers, as announced in writing by the state unit.

Founded as Consumer Finance Division of Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), after five years of establishment, FE Credit became an independent company in 2015.

As a non-bank lender, FE Credit does not receive deposits but does make loans to customers for personal use.

Previously, the Department of Competition and Consumer Protection under the Ministry of Industry and Trade (MOIT) reported continuously receiving complaints from consumers related to the firm.

Many people have complained they had been bombarded with constant phone calls in the last six months at a frequency of almost ten calls a day despite borrowing no money from the company.

The issue went far as some debt collectors of FE Credit even denoted signs of harassment and threatening these people.

“It concerns us [the Department of Competition and Consumer Protection] that these forms of harassment are currently affecting citizens’ everyday life and work,” said a representative of the state agency.

After news of the inspection hit the media, FE Credit explained the controversy in a written response on Monday.

“According to our procedures, customers will have to declare two people as references in case there is bad debt or overdue debt when completing their loan application,” the answer reads.

“The company will make calls to those provided contacts to urge repayments."

“The wrong phone calls might happen when the references no longer use these phone numbers or have sold them to others, or the numbers were incorrectly input in the beginning.”

FE Credit also admitted some of its debt collectors showed inappropriate attitudes over the phone and said that the firm had sent its apologies to those who were disturbed by mistake.

It is now examining its own data to remove the wrong numbers from the system and will report to the State Bank of Vietnam.

Phone call harassment is not the only issue over which the personal finance lender will be inspected.

Around the end of 2017, many consumers, mostly women, also complained to the Department of Competition and Consumer Protection about FE Credit duping them into purchasing the Deaura company’s cosmetics set.

A Deaura cosmetics set is seen in this photo. Photo: Tuoi Tre
A Deaura cosmetics set is seen in this photo. Photo: Tuoi Tre

The set valued at VND40 million (US$1,760) was sold by Deaura, now the Venesa company, in the form of installment payments through loan contracts between the purchasers and FE Credit.

However, the consumers asked to return the products and wanted to cancel the loan agreements with the finance company after thinking that FE Credit was the actual seller, not Deaura, tricking them into becoming its debtors.

“The consumer finance agent rushed me to sign the loan agreement without me reading it thoroughly,” a consumer said in her complaint sent to the department.

In addition, the lending staff members were also accused of not letting the consumers keep or take copies of the loan contracts, reasoning that they had to be brought back to the company for stamping and would be sent to the consumers by post.

Apparently, low- and average-income earners who want quick money, without having to complete bank procedures or putting up collateral, to buy things are target customers of consumer finance companies like FE Credit.

Borrowers do not need to put anything up as collateral and are only required to prove they are capable of repaying the loans.

It is unknown why there were cases of unqualified customers who had unstable sources of income, but were still paid out by the company.

Indirectly addressing the issue, the firm stated that it gave out the loan product in compliance with regulations.

“Our contract template has been registered at the Vietnam Competition Administration Department,” the company claimed in the response.

“The legal relations between FE Credit and consumers are independent of the correlation between Deaura and consumers, while the loan agreement does not violate any obligations, so the request to cancel the contract is not legitimate.”

Even so, FE Credit still supports contract termination where appropriate.

The lender, in return, insisted on reviewing its internal process and handling it severely if there really were such violations as in the complaints.

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