Banks in cahoots with crooks?

A consumer group says 99% of banks are guilty and threatens to file class action suits.

PETALING JAYA: A consumer group today accused local banks of failing to protect their clients’ rights through negligence and unethical practices.

Alleging that 99% of banks were guilty, the Consumer Association of Subang and Shah Alam (CASSA) told FMT that it would be filing class action suits against them, but did not say when.

CASSA president Jacob George said the complaints his organisation had received covered more than 400 cases of various breaches of duty to bank clients. He added that these complaints had become more frequent in recent days.

He alleged that these breaches were the result of an “unfortunate symbiotic relationship” between banks and “predators”. He also attacked Bank Negara for its alleged failure to rein in the culprits.

“Banks are very protected, and Bank Negara has done nothing,” he said.

George’s comments followed a FMT report about mutton seller A Muthukrishnan, 44, who may soon lose his home in Selayang Baru after a group of licensed money lenders allegedly duped him into signing a set of documents.

Muthukrishnan is now disabled. He said he lost his thumb after being set upon by thugs hired by the money lenders. He also blamed Standard Chartered Bank, saying it had neglected to inform him that it was finalising the transfer of his house to the money lenders.

George’s comments today came five days after he held a press conference over the issue. On Sept 5, he highlighted the plight of Paul Murugesu, a 53-year-old businessman who bought a piece of land in Klang for RM11.5 million in 2010, but which his bank auctioned off two years later, allegedly without giving him a chance to settle his loan.

Major flaw
“In the case of Muthukrishnan,” George said, “it seems arrogant for the bank to imply that he was wrong in going to the media.

“This shows the true character of the banks. They just don’t want bad publicity. How then can an ordinary man raise his grouses?”

He said the bank in question owed a duty to its clients to stop third parties from manipulating the system.

“The bank owes Muthukrishnan a fiduciary duty to immediately inform him of a suspect or unusual behaviour of a third party, and not allow the man to lose his house without even giving him proper notice,” he said.

“It is a major flaw and the fault lies with the banks for thinking they have absolute powers over properties.”

“The banks’ first duty is to protect the interest of clients. Why did they communicate with outsiders? Even if there was power of attorney, wouldn’t you check with your client first?

“It’s the same with credit cards. Shouldn’t a bank call up the holder when a suspicious purchase is made?”
In making the threat of class action suits, George claimed to have information that unscrupulous parties were paying huge sums of money for insider information from banks.

“Banks are also working alongside racketeers, smugglers of drugs and tobacco, money lenders and loan sharks,” he said. “Are these people using banks to launder money?”