ConsumerTalk with Wendy Knowler, Good to Know with Wendy Knowler, Good to Know with Wendy Knowler

Banks and insurers can – if they wanted to – serve us better. Here’s how…

On Monday, consumer journalist Wendy Knowler met with a group of financial services ombuds from around the world (US, New Zealand, Taiwan, Singapore, India, Finland, Switzerland, Armenia, Mauritius and other countries).

The group assembled at a game reserve in Pilanesberg for an annual conference.

Contract (pixabay.com, 2019)

All of them operate with Swiss-like neutrality, in assessing the complaints lodged by disgruntled clients against their insurers, banks and investment companies.

Wendy Knowler, consumer journalist

Unsurprisingly, says Knowler, they all deal with similar issues:

  • Failure to use simple language in their Ts and Cs.

  • Failure to reimburse victims of fraud.

  • Consumers not bothering to read “horribly small, legalese Ts and Cs".

Several interesting suggestions came from a brainstorming session about disclosure and transparency Knowler attended:

1. Replicate the US’ “Card Act”. On every credit card statement, banks are compelled by law to disclose in full what the interest implications are, should the client wish to pay her or his debt in full that month as opposed to over longer periods.

I think it’s a wonderful idea, especially given the very low levels of financial literacy in this country. As I sat there listening to them, I kept thinking of South Africa’s car finance contracts that don’t draw the customer’s attention to the fact that it’s a balloon deal. That last big final payment is not put in big bold print, and the customer is not required to sign next to it. I can understand how some people get towards the end of their contracts and only then realise that they signed a balloon deal.

Wendy Knowler, consumer journalist

(Also, read: “How to buy a new car even if you don’t really have enough money for it”)

The layout and design of contracts play into the hands of unscrupulous dealership staff who don’t properly explain how a balloon deal works, alleges Knowler.

There’s no proof of what was said face-to-face. There is just the contract. That needs to change.

Wendy Knowler, consumer journalist

The message, loud and clear, from those ombuds to financial institutions:

Don’t hide all the important aspects of a contract with financial implications in the small print!

2. Credit providers should give a “sample sheet” to consumers. This should clearly indicate the monthly cost of a loan (including all additional fees) and how adjusting the amount a client pays back – and the term - will affect the total cost of the loan.

What a brilliant idea! I can’t see how credit providers could justify not doing that…

Wendy Knowler, consumer journalist

3. Banks and insurance companies should highlight five things from insurance and home loan contracts that frequently catch consumers unaware in a way they can’t miss or misunderstand.

For example:

  • The cost of settling a loan early.

  • Rejection of claims for stolen cars without tracking devices.

  • The cost of defaulting on a loan or credit when you get “handed over”.

  • Rejection of claims should a consumer replace a SIM in a phone insured by the cellphone company.

…the rest of the Ts and Cs are important… but there is huge justification in very proactively drawing consumers' attention to the most important ones…

Wendy Knowler, consumer journalist

The Money Show’s Bruce Whitfield interviewed Knowler.

Listen to the interview in the audio below.

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:

Subscribe to our Business Wrap Newsletter


Recommended

by NEWSROOM AI
Read More
Markus Jooste must finally – for the first time – explain himself in court

Markus Jooste must finally – for the first time – explain himself in court

He tried – but failed - to stop a R740 million damages claim against him. Bruce Whitfield interviews Financial Mail's Rob Rose.

Peter Moyo wants Old Mutual to pay him R250 million

Peter Moyo wants Old Mutual to pay him R250 million

Moyo wants to be the CEO. If that won’t happen, he wants R250 million. Bruce Whitfield interviews business journalist Ray Mahlaka.

Old Mutual takes out bizarre full-page advertisement in Business Day

Old Mutual takes out bizarre full-page advertisement in Business Day

Advertising expert Andy Rice slams it. The Money Show’s Bruce Whitfield’s response to the advert? “Hahahahahahahaha!”

Woolies CEO earns R191m despite R11bn of write-downs and R32bn of market losses

Woolies CEO earns R191m despite R11bn of write-downs and R32bn of market losses

It’s good to be a CEO in South Africa – whether you screw up or not, says a disgusted Anthony Clark (Small Talk Daily).

How to retire before you’re old

How to retire before you’re old

Exhausted? Do things differently and retire while you’re still relatively young, says personal finance expert Warren Ingram.

8 tips from 'the greatest unit trust investor ever'

8 tips from 'the greatest unit trust investor ever'

Peter Lynch managed the world’s best-performing unit trust for 13 years, says personal finance expert Warren Ingram.

Popular articles
[WATCH] Fikile Mbalula's funny interview has social media in stitches

[WATCH] Fikile Mbalula's funny interview has social media in stitches

Khabazela shares tweets and Facebook posts that have gone viral.

 Eskom buys fine coal that looks like baby powder when wet, says expert Ted Blom

Eskom buys fine coal that looks like baby powder when wet, says expert Ted Blom

Energy analyst Ted Blom weighs in on the energy crisis in South Africa as load shedding stage 2 is implemented.

SA's Zozibini Tunzi simply the best, crowned Miss Universe 2019

SA's Zozibini Tunzi simply the best, crowned Miss Universe 2019

The 26-year-old is the third South African to be crowned Miss Universe and has made the country proud.

Want to start a small business? Lessons from a successful serial entrepreneur...

Want to start a small business? Lessons from a successful serial entrepreneur...

The Money Show’s Bruce Whitfield interviews Nic Haralambous, founder (at the cost of R5000!) of funky sock company Nic Harry.

Considering emigration? Financial planner discusses the affordability of leaving

Considering emigration? Financial planner discusses the affordability of leaving

Can you afford to leave South Africa? Certified Financial Planner (CFP) Barry O'Mahony on what to consider before deciding.

'SAA’s collapse plays nicely into hands of a politically constrained Ramaphosa'

'SAA’s collapse plays nicely into hands of a politically constrained Ramaphosa'

After dithering for fear of spending political capital, SAA is now out of the President’s hands, says Pieter du Toit (News24).

There is no Ubuntu in how Khanya Cekeshe has been treated - Thuli Madonsela

There is no Ubuntu in how Khanya Cekeshe has been treated - Thuli Madonsela

Former public protector says the eight-year sentence was too harsh and it shouldn't matter that he was not a Wits student.

‘South Africans are getting poorer and poorer because of politics’

‘South Africans are getting poorer and poorer because of politics’

SAA is a classic example, says Isaah Mhlanga, Chief Economist at Alexander Forbes Investments.

How to make your first R1 million (after that it just becomes so much easier)

How to make your first R1 million (after that it just becomes so much easier)

Rich. Wealthy. Financially free... Call it what you will; the first million is how you get there. Warren Ingram on his book...