Financial News Multifinance: Advances low so source of dispute with the consumer

Financial News Multifinance: Advances low so source of dispute with the consumer -
JAKARTA: Indonesian Consumers Foundation appraise low down payment financing to launch a major cause disputes between multi and consumers.

Tulus Abadi, Executive Board of the Indonesian Consumers Foundation (YLKI), said reports of disputes between consumers and motorcycle financing company among the highest received by it.

"The reason, the consumer is unable to pay because of insufficient income. On the other hand the actual consumers in the category have not been able to buy a motorcycle on credit, lured by the multi down payment, "he told Business Wednesday (08/29/2012).

Because it pertained not capable, then the chances of bad debts large enough that eventually carried withdrawal by the multi-collateral. "Most of the funding was used hire purchase system, so that the collateral may be withdrawn at any time if the credit crunch," he said.

For that, he considers the tightening of loan to value or increase in cash advance can be the solution of the upstream side in order to avoid disputes between consumers and multi.

"With the payment of at least 20% of the consumers can be more creditworthy than lower down payment even without a down payment," he said.

The downstream side, he considered there should be appropriate procedures in case of legal disputes. One of them by registering the object of financing as a fiduciary. This is intended to prevent the withdrawal of collateral arbitrarily by the multi. (arh)