IN the past two weeks, we shared the results of a consumer survey associated with the hire-purchase (HP) industry. This survey has been conducted by Fiji National University under the Council's AusAID project titled Consumer Financial Protection & Building Credit Competency for Vulnerable Groups.
As part of this survey, consumers have suggested a number of other areas in which they needed information, which may not be directly related to the HP business.
The report on The Hire Purchase Industry in Fiji recommends that such information could be provided by independent parties like the government or consumer advocacy groups, including Consumer Council of Fiji.
These areas are:
* Consequences of HP;
* Why sellers should be fair;
* Awareness regarding impulsive buying;
* Basic information as illiterate people don't understand the concept of HP;
* Tactics used by the seller before buying goods on HP;
* Importance of comparing items and prices across different sellers before rushing to buy from any one seller;
* Government should introduce more competitive markets;
* How not to be persuaded to buy goods through HP;
* Importance of saving money;
* Social responsibility of sellers; and
* Ethical aspects of selling goods on HP.
The survey reveals that 51 per cent of the consumers feel that the government has not done enough to regulate the HP industry.
The HP report points out to the following reasons and recommendations:
* First, noteworthy is that almost two thirds of consumers state that after knowing how the HP system works and the problems they have encountered in HP, they would still purchase goods on HP. This is on account of the financial strengths of the families concerned. Better financial management behaviour is necessary for consumers to avoid the HP trap.
This can come from financial literacy programs through agencies like the council and schools with some attention paid to cultural contexts in which individuals or families may find it difficult to withhold accumulated savings when asked for contributions to traditional obligations.
* Second, activist agencies can subject the HP companies to greater scrutiny by becoming the vehicle through which consumers can channel their grievances.
Regular media coverage of consumer problems with HP dealers through new TV programs, media releases and information packs - would shame HP companies into behaving more ethically.
* The related issue of the mandate of the council also needs to be addressed.
Whether the scope of the legal authority of the council should be extended to enable the council to also become a financial ombudsman, with decision making authority on consumer grievances about HP and other financial matters, is relevant.
* What is clear is that the existing mechanisms in Fiji do not work.
A new approach to addressing consumer financial grievances, including those on banks and insurances, is necessary.
Granted this will show lack of confidence in the existing institutions, particularly the Reserve Bank of Fiji, which claims to be the authority on financial grievances but this matter of turf needs to be kept aside and real consumer issues need to be addressed appropriately.
This matter involves hundreds of millions of dollars of consumer incomes and expenditures annually and adequate redress must be provided to consumers on their disputes.
* In any case, at present there is no proper institution which can authoritatively deal with HP grievances.
To this extent, the matter of an independent Financial Commission and Financial Ombudsman needs to be pursued further.
To empower consumers in financial services, the council with the assistance from Australian Aid Program (AusAID), embarked on a project Consumer Financial Protection & Building Credit Competency for Vulnerable Groups to enhance the ability of consumers to make informed choices while accessing credits and to manage their debt responsibly.
This project aims to teach consumers to better understand their financial obligation, credit contracts, hidden costs and cost of borrowing when accessing credit.
Under this project, the council will launch its first ever consumer show known as Dollars and Sense which will assist consumers to learn from other consumers experience when they accessed credit to buy a home, car, white goods to name a few.
The program will be aired on Fiji TV's platform on Tuesdays at 8pm with the first episode premiering on October 16, 2012.
* This is a regular column from the Consumer Council of Fiji. Email: email@example.com for feedback.