SHENZHEN S consumer council has warned borrowers about commercial banks allegedly misleading consumers when granting loans.
In a recent case, a resident identified as Zeng signed a loan contract on the basis of the bank s promise of a low interest rate requiring no guarantee, yesterday s Daily Sunshine reported.
However, when Zeng received the contract from the bank one week later, he learned that, besides the regular interest, an account management fee would be charged on a monthly basis rather than on an annual basis as he had been led to believe.
With the monthly management fee added, interest on the loan was triple the amount the bank had claimed, according to the report.
Zeng said the bank employees did not correct his misunderstanding about the management fee before he signed the contract.
Although the bank employees mentioned the account management fee before signing the contract, they did not mention the related clauses to be found in the contract s small print.
The consumer council said it suspected the bank of violating the law by only highlighting the low interest rate and failing to mention the account management fee in its promotion.
In addition, bank employees had intentionally misled the customer when discussing the account management fee, not detailing how the fee would be charged, the council said.
Customers can ask to invalidate a contract when their rights are infringed, according to the council.
However, the council said customers should read contracts carefully before signing and not rely on verbal descriptions by the banks of their products.
(Martin Li)
