Warning about online loan services collecting customers' Zalo and Facebook

According to this agency, recently, the Vietnamese market has recorded the rapid development and explosion of online lending models, including some lending models based on the combination of consulting companies and pawn service companies.

From the reality of receiving and resolving consumer complaints about some of the above mentioned online lending and pawnshop models, through the process of reviewing the operations of some related companies, the Department of Competition and Consumer Protection initially recorded a number of problems.

Accordingly, some companies collect contact information of relatives, colleagues, and workplaces of borrowers but do not state the purpose of using this information (for example, to contact when reminding/collecting debt).

Many people have fallen into the trap of online lending companies with exorbitant, ambiguous interest rates. Illustration photo16px

Others collect information about the applications that borrowers often use (Viber, Facebook, Zalo...) but do not clearly state that they will check or contact the friends list on these applications when the company collects/reminds about debt.

These companies also use phrases and images that can mislead borrowers about the company being allowed to provide lending services, while these companies are only allowed to provide consulting services without lending functions, for example: "online lending unit"; "finance company"; "providing quick loans"... or images and diagrams focusing on loan disbursement...

These entities also do not provide detailed, specific information about whether the loan will be made through pawnbroking activities or do not disclose the subjects participating in the lending.

They also do not provide clear and complete information about the costs arising from the loan, for example: only providing the loan interest rate, not providing specific information about consulting fees, property appraisal fees, property storage fees, file management fees, etc. These fees often account for a high proportion of the total costs that consumers have to pay, leading to consumers not being able to fully estimate the total costs to be paid when borrowing.

In addition, during the process of consulting or registering for loan information on the website, consumers are not given favorable conditions to read and study the contract content or information about the subjects related to the lending activity. In some cases, consumers are asked to confirm their signature (by electronic means) before receiving the contract content (sent via email later).

In particular, in the contract, the general terms of transaction have some unclear contents, not strictly complying with the provisions of the law on protecting consumer rights.

Therefore, the Competition and Consumer Protection Department warns online borrowers to be cautious before providing personal information to register for a loan. In particular, carefully study the purposes of using information when making transactions.

At the same time, consumers must request a copy of the contract after signing. Carefully study the contract content and consider the costs to be paid when participating in online loans because the actual fees can increase many times.

Notably, this warning was issued by the Competition and Consumer Protection Department more than a week before the Lunar New Year, when people's demand for cash for Tet shopping increased. Meanwhile, the online lending model is considered to be booming with easy procedures but also has many potential risks when some companies combine with debt collection services to "terrorize" people.