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CFTC says it handles more financial sector complaints

 

The Competition and Fair Trading Commission (CFTC) says 40 out of every 100 complaints it handled in  the 2016/17 financial year were from the financial sector.

Speaking during this year’s commemoration of the World Consumer Rights Day in Mzuzu on Friday, CFTC chief executive officer Wezi Malonda said consumers in the country face various challenges as they conduct financial transactions.

Malonda: There is an increase in complaints

“The financial sector is dominated by a few players, which is worrisome to CFTC. Consumers are, therefore, exposed to exorbitant lending rates and are suffering because the sector is not competitive,” she said.

According to Malonda, there is an increase in complaints related to the sector, ranging from non-disclosure of important information and deductions for transactions that did not occur, among others.

“For example, consumers also complain of being charged at ATMs [automated teller machines] for failed transactions. The process that the consumers go through to reverse such transactions is unfair,” she said.

Malonda said CFTC has observed that banks also take more time to reduce their lending rates following reductions in policy rate by the Reserve Bank of Malawi (RBM).

“Consumers are, as a result, subjected to high interest rates which is affecting more businesses which would thrive by accessing loans at fair rates. Unfortunately, the rates are exploitative and only fair to the banks and not the consumer,” she said.

In September 2017, RBM chief examiner for protection and financial literacy Madalitso Chamba told the media that the regulator started taking complaints in 2013.

At that time, only 13 were reported, but the figure rose to 500 by 2017.

Most consumers are complaining of unfair treatment by banks and other players in the financial sector.

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