In response to a number of consumer complaints received concerning the application of extra service charges and other fees in the Kingdom’s banks, the Consumer Protection Association (CPA) has said it is planning to investigate and prepare a complete study soon.
“We are looking into launching a study soon, outlining bank policies concerning credit cards, loans, grace periods, installment programs and stipulations on savings and checking accounts. Once we have compiled the information, we are planning to create a report, which will allow consumers to have full information available when choosing banking services,” said Nasser Al-Tuwaim, CPA chairman.
He added that some consumers had complained of being assigned a “profit charge” when paying the minimum monthly payment on their credit cards, with only half the payment actually being applied to the principle bill. However, he explained that this could be due to banking policies concerning the grace period for payments, which could be from 20-30 days depending on the bank’s policy.
Al-Tuwaim stated that the purpose of the study is mainly to allow people to become aware of their rights, adding that any banks found to incorrectly charge service fees would immediately be reported to the proper authorities by the CPA.
“With most, if not all of the banks in the Kingdom being Shariah compliant, it would be impermissible for them to take interest or extra service fees,” Al-Tuwaim commented.
In addition, the report will include consumer advice on keeping credit card and account information safe and how to avoid fraud.
In January, the CPA launched an investigation into whether the Saudi Credit Bureau had been charging compound interest. “Banks do not have the right to impose compound interest when they finance clients,” Al-Tuwaim reportedly said, adding that no case would be closed until it had been thoroughly checked and necessary actions taken. The investigation is still ongoing.
CPA to study service charges in banks
