As with all relationships, the relationship between borrowers such as ourselves, and lenders who are financial institutions, can be rocky. Things usually start off great during the “courtship” period, that is, when the bank is courting your business, but further down the road, the “couple” can become “estranged”.…resulting in relationship breakdown and ultimately, “divorce”.
This sort of divorce can be just as costly as its marital counterpart – as it usually involves a demand for full payment from the bank, followed by attempts to liquidate the asset on which the loan was secured, if the borrower cannot meet the demands. Such assets may include property, vehicles, etc.
Sadly, disputes between borrowers and lenders are all too common. A large number of these disputes end up in court. However, the litigious route is costly, lengthy and time-consuming. This is especially so if the borrower is already facing financial constraints.
The bank will be represented by a panel of high-profile lawyers. The bank having very deep pockets, can afford to exorbitant legal fees.
Meanwhile, you as the borrower, will need to pay for your own lawyer. This is an extra cost that you can well do without incurring.
Meeting with your lawyer, compiling documentation requested by him/her to build your case, and appearing in court will take up a lot of your time and energy.
Instead, why not explore your options at the Financial Mediation Bureau (FMB)?
Here are a couple of facts to get you started in exploring the options.
What is the FMB?
The FMB is a non-profit organization which was set up by Bank Negara, set up to help settle disputes between lenders and its members, the financial institutions. The FMB offers a convenient and more cost-effective alternative, to the courts.
What’s the scope of its services?
According to its website, the FMB’s jurisdiction extends to complaints, disputes and claims relating to banking, finance, personal loans, housing loans, ATM issues, cash deposit machine issues, credit card issues, hire purchase issues, savings account, current account /fixed deposit problems, hire purchase issues, e-banking issues, internet banking issues, insurance and takaful-related matters.
For banking matters, the limit is RM100,000 (except for fraud cases involving payment instruments, credit cards, charge cards, ATM cards and cheques for which the limit is not more than RM25,000). For insurance and takaful-related matters on the other hand, the limit is RM200,000 (Motor and fire insurance/takaful) ,RM100,000 (Others) and RM5,000 (3rd party property damage).
There are some disputes however, that FMB will not be able to assist with. These include complaints, disputes or claims relating to pricing and product policies, services, credit decisions, fraud cases (with some exceptions), or cases that are time-barred under the relevant legislation, or are pending before the courts or form the subject matter of existing alternative dispute resolution processes such as arbitration.
How much must I pay?
Nothing. FMB’s services are provided free of charge.
What’s the procedure?
You must first approach the financial institution, speak to the customer relations officer, discuss your particular claim or dispute, and obtain a final decision from the financial institution in the form of a letter. You will need this letter, in order to approach FMB. It is not possible to skip this step and go straight to FMB.
How and when do I approach FMB?
You can go in person to the FMB, or write in attaching the details of your claim/dispute, together with the relevant supporting documents.
What’s the effect of the decision received from FMB? What if I am not satisfied with the decision?
The decision is binding on the financial institution concerned. That means, the financial institution has to abide by it. However the decision is not binding on you. You may still pursue all available legal remedies available to you, against the financial institution.
Even if you are dissatisfied with the decision of the FMB, you may still pursue all available legal remedies available to you against the financial institution, even after you have obtained a decision on the same matter from the FMB.
However, note that if you do accept a settlement sum from the financial institution pursuant to the decision of the FMB, you cannot subsequently go to court to “claim” again.
Where is FMB located?
Level 25, Dataran Kewangan Darul Takaful
No. 4, Jalan Sultan Sulaiman
50000 Kuala Lumpur
Telephone : 03-22722811
Fax : 03-22745752
Hopefully, the above information is of use to you in advising your friends, family, clients about the FMB’s services, or even in relation to your own personal financial matters. Given the extreme cost-effectiveness of their services, it is well worth trying them out before pursuing the more costly route of litigation.