Competition authority warns of online loan scams

Dec 10th at 10:00
10-12-2019 10:00:00+07:00

Competition authority warns of online loan scams

The Ministry of Industry and Trade’s Vietnam Competition Authority (VCA) has warned local consumers to be cautious about taking out online loans amid rampant scams.

 

According to VCA, online loans are available in Viet Nam, but the legal framework for this kind of lending hasn’t been issued yet. As a result, this model puts borrowers at risk.

VCA said it has received multiple complaints about these scams, advising that when taking out online loans, consumers should choose service providers that have published their business information, including their names, business codes, addresses and telephone numbers, on their websites or apps.

In addition, their websites or apps must feature information on transactions, including information security policies, sample contracts, fees and the roles of parties.

Lenders whose websites or apps do not include this information may be involved in fraud.

According to VCA, legitimate lenders send loan agreements to borrowers for reference before entering into transactions.

After signing a loan agreement, if the lender does not send a copy of the agreement or instruct the borrower to download it, the borrower should immediately ask them to do so.

Consumers should know the interest rates and fees of these loans, which tend to be high, and store relevant information, to be used as evidence in case of disputes.

Borrowers should lodge complaints with lenders in writing, instead of by telephone, to keep a record of the lender’s commitments made while handling the dispute.

In a move to prevent loan scams, the Government is scrutinising to issue a decision to allow a pilot implementation of peer-to-peer (P2P) lending in the country before officially developing laws for the new lending model.

According to the SBV, the fourth industrial revolution has promoted the development of many new products and services, including P2P lending, which is designed and developed on the basis of digital technology to directly connect borrowers with lenders without going through financial intermediaries such as credit institutions or foreign bank branches.

According to Pham Chi Quang, Deputy Director of the State Bank of Vietnam (SBV)’s Monetary Policy Department, if P2P lending is well managed, it would facilitate inclusive finance, especially in remote areas where the banking sector remains underdeveloped. The lending will also help customers, especially household businesses and small- and medium-sized enterprises access banking and finance services at low costs.

The development of P2P lending will also create a new capital supply channel. Research conducted by Transparency Market Research showed that P2P lending would surge by 48.2 per cent annually in the 2016-24 period, while Morgan Stanley forecast the business model would reach a growth rate of 53.5 per cent globally by 2020.

bizhub



RELATED STOCK CODE (2)

NEWS SAME CATEGORY

Promoting cashless payments to boost internet economy

Cashless payments would not only increase of the circulation of capital, it would also help boost the internet economy, said Deputy Prime Minister Vu Duc Dam.

The Ministry of Finance proposes reducing import tax on some foods

The Ministry of Finance wants to reduce import tax on some foods and has asked ministries and organisations for opinions on the idea.

Remittances to HCM City set to top $5 billion

Remittances to HCM City from overseas in the first 11 months of 2019 exceed US$4 billion, and are expected to top $5 billion for the year, according to the State...

VN financial sector embraces digital era: conference

Many banks and finance companies have proactively adopted technologies to provide digital financial services, Nguyen Hoang Minh, a senior central bank official said.

Competition authority warns of online loan scams

The Vietnam Competition Authority, under the Ministry of Industry and Trade, has advised local consumers to be cautious in taking out online loans amid rampant...

Consumer finance firms urged to invest in technology

Consumer finance companies should invest more in technology to avoid lagging behind in the digital era as technology has dramatically changed consumer behavior...

SeABank's strong impression in the first nine months of 2019

According to the State Bank of Vietnam, the banking sector’s business performance in the first nine months of 2019 has been continuously improved with good results...

Realty credit tightening to have no impact on low-income homebuyers: experts

The State Bank of Vietnam’s recent move to tighten loans in the real estate sector is expected to have no impact on low-income earners who wish to purchase...

Central bank cuts compulsory reserve interest rates

The State Bank of Vietnam (SBV) announced Monday it has lowered the interest rates on compulsory reserves at banks by 0.4 percentage points.

Central bank lowers reserve ratio

The State Bank of Vietnam has cut the reserve ratio in local currency at credit institutions to 0.8% from the previous 1.2% per year, applied since 2005.

Bank stocks

Insurance stocks


MOST READ


Back To Top