Spike In Fiscal Strife, Loan Cases, Drives NGO To Step Up

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    NGO 4PM assists loan defaulters. - photo credit Property Guru

    NGO 4PM has a proven track record in helping loan defaulters spanning its 8-year existence of withholding public auction of properties at the very last minute and there were occasions when it was just a few hours before the auction was due to begin.

    Since 2013, the Persatuan Penyelesaian Pengguna dan Peminjam Malaysia (PPPPM), referred to generically as NGO 4PM, has been actively involved in focusing on resolving issues faced by Malaysians who are unable to make ends meet to service their loan monthly commitments.

    However, because of their experience in handling such matters, they felt the need to set up a Unit Siasatan that acts a one-stop centre to solve Credit, Civil Action and Public Auction issues.

    According to Abdul Wahab Abdul Rahman, the NGO’s Senior Activist and heads the Unit Siasatan, this unit was set up after they discovered that a few complainants that came to them were not genuine about the problems they were facing.

    Misrepresentation Of Loan Status

    “There was even a case of a bank borrower who informed us that he defaulted on his monthly repayments for eight months, which turned out to be the case. 

    “When we referred to the bank subsequently, we were told that he has been owing the bank for eight years.  We also have cases of bank borrowers who like to piggy-back on our track record of successes and dictate to us that they want a maximum discount for settlement of their loans.”

    These, coupled with a few other reasons, are why the NGO does not accept all cases that come to them at face value.  There is a lot of checking and probing to be done before they accept any case because it is vital for them to safeguard their professional relationship with the Banks whom they interact with almost daily.

    “It works on the basis of cooperation for a “win-win” situation, but we still have to be reasonable in our request to the banks. And members of the public usually have a misconception of the roles and responsibilities of NGO 4PM,” Abdul Wahab added.

    “There are those who are of the opinion that this NGO provides financial assistance whenever we take up their cases and negotiate with banksUnfortunately, we are not in a position to provide financial assistance, but instead, we negotiate on their behalf for a reduction in their monthly loan instalments and extension of their loan tenor, via rescheduling or restructuring of the loan facilities.”

    Services For Loan Defaulters And More

    Among the services provided by the NGO include stopping the harassment and intimidation by Bank’s appointed debt collection agencies; withholding of Civil Action, ie seizure of household items, Summons, Judgment, Bankruptcy & Winding-up and withholding of PUBLIC AUCTION of Properties and Vehicles.

    Other services include clearing the borrowers’ names from the blacklist of CTOS and CCRIS; stop the repossession order on vehicles; reschedule or restructure of Loan facilities with reduction of monthly installments and procuring discounts for settlement of Defaulted Accounts.

    Apart from that, the NGO also works on the annulment of BANKRUPTCY status of their clients and represent Borrowers in Court by their panel lawyer to uphold justice.

    Abdul Wahab also advised their clients on the best way to settle their debts/loans.

    “Having attended to more than 200 cases assigned to me since 2013 as a Senior Activist of this NGO, suffice  to say that there is one particular behavior of borrowers who, upon being eligible to withdraw their Employees Provident Fund (KWSP) would, without hesitation, proceed straight to the banks to settle their long defaulted loan account. 

    “Of course, the Banks will be very happy to receive such full payment, but don’t the Borrowers know that they can get a discount for settling the full amount?  It is such a waste giving their hard-earned money meant for their retirement to the banks,” he said.

    Apart from what was mentioned, Abdul Wahab disclosed a misconception that banks have towards NGO 4Pm.

    “When we started in 2013, a lot of the banks refused to cooperate with this NGO because they considered us as a third party and interfering in the affairs of their customers.  As time gets by, the banks understand our role and function and after three years in operation, all the 22 banks’ head offices in Kuala Lumpur have accepted us.

    “Many of our members had told us that they have personally had negotiations with the banks for indulgences but always fail to get the Banks’ cooperation.  Instead, the banks pressured them to pay-up OR ELSE, drastic action would be taken like Seizure of Household Items, Salary Attachment, Auction of Property, Bankruptcy, etc.”

    Differences Between AKPK And NGO 4PM

    Another confusion is between the role of government agency AKPK (Agensi Kaunseling & Pengurusan Kredit) and NGO 4PM.

    Abdul Wahab clarified that NGO 4PM’s services, particularly that of the Unit Siasatan, are almost all-encompassing.

    “The only caveat is that we do not handle cases pertaining to loans from Licensed or Non-Licensed Money Lenders.  Many individuals have likened this NGO to the services provided by AKPK .  Yes, in some ways this NGO is like AKPK but members of the public should be made aware of the differences,” he pointed out.

    There are altogether eight differences, namely:

    1. AKPK is a Government Agency of Bank Negara Malaysia.  Therefore, it does not charge those that are registered with AKPK.  NGO 4PM charges a yearly Membership Fee of RM200.00 and other fees if necessary, such as the Valuer and Lawyer who charge for their services according to their scale of fees. Besides, it also Donors who extend their support the NGO’s activities.
    2. Borrowers assisted by this NGO 4PM can still apply for a Bank loan after the repayment plan is accepted by the Bank and with proven six months good payment record but once registered in the AKPK Program they are restricted from applying any new loan.
    3. The Monthly Installments for cases handled by NGO 4PM are normally fixed throughout the loan tenor, but under AKPK it will normally be via STEP-UP Installments  e.g. The first two years’ installments are within the affordability of the Borrowers but after two years and above, the monthly installments are normally increased substantially and beyond the Borrowers’ affordability as what is normally reported to this NGO (this is the reason why most of those borrowers after going through the “Debt Management Program” run by the Government Agency return to NGO 4PM with a request to assist them negotiate with the banks).
    4. Besides Consumer Loan, this NGO 4PM can also help cases involving Business Loan while AKPK only attend to Consumer Loan cases.  Furthermore, if the Consumer Loan was provided by/ from a non-bank entity such as Courts Mammoth, AKPK is unable to assist, unlike in the case of NGO 4PM.
    5. NGO 4PM have a proven track record spanning its 8- year existence of withholding public auction of properties at the very last minute and even a few hours before the auction is due to begin.  AKPK will not entertain such cases.
    6. NGO 4PM have also a proven track record  of handling  COMPROMISE SETTLEMENT ARRANGEMENTS with a substantial discount and even up to BELOW THE PRINCIPAL AMOUNT.  Under AKPK, the Borrower will get a waiver of Interest portion but still need to pay the Principal Amount.
    7. On record, NGO 4PM had been handling many cases of Government Servants having defaulted Housing Loan accounts with LPPSA (Lembaga Pembiayaaan Perumahan Sektor Awam) since they were not able to get any assistance from LPPSA.
    8. AKPK do not handle Bankruptcy cases.  People who want to get out of Bankruptcy status could approach this NGO as we are a known “Insolvency Practitioner” recognized by the Department of Insolvency as “RAKAN MdI” who will negotiate with the Banks and arrange for ANNULMENT with the help of our panel Lawyer.

    NGO 4PM is registered with the Registrar of Societies and is under the purview of the Ministry of Home Affairs.  The people who visit their Office at Bandar Baru Ampang on the 4th Floor of the Spectrum Shopping Mall are due to circumstances which are beyond their control and get into trouble with the banks for not being able or cannot afford to pay their loan monthly commitments.

    Abdul Wahab can be contacted at 012 692 6378 and E-mail :  siasatan@ppppm.org.my .

    This article is part of NMH’s CSR outreach program.

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