Ethical Issues In Banking

One of the ethical issues that may arise from Maybank’s Hire Purchase product is unfair debt collection. For instance, a customer applies for Maybank’s Hire Purchase to finance a car of his liking, regardless of whether the car is new, second-hand, or even reconditioned. After the bank (Maybank) goes through the credit history of the customer, the bank has found out that the customer has a bad credit history. Many of his previous loans have been delayed in payments or even declared as losses by the other banks. In normal circumstances, any bank would immediately reject the application, as it may be a potential loss to the company, and the customer may create problems for the bank in the future. However, Maybank still approves the loan, ignoring

To appoint the right debt collector company, the bank should do a thorough research on finding the right debt collector company. Every debt collector companies have their own specialty in dealing with certain debtors. For instance, some are good at securing funds from big corporations while the others are better at dealing with small businesses or even home-businesses. If by all means possible, the bank should discover what are the types of debtors that the debt collector company most of the time handles and the types of businesses the debt collector company serves.

Sometimes, even though the bank has done a lot of research on the particular debt collector company, there is always a small likelihood that the particular debt collector company uses forceful methods on the debtor or maybe the debtor has a hunch that the debt collector company has been acting in treachery. In these circumstances, the debtor can file a lawsuit against both the bank and the debt collector company. No matter how the case ends (regardless whether the bank wins or losses), the bank must be certain that the bank itself would not be fully accountable for appointing the debt collector company. Therefore, it is important for the bank to get a solid proof of insurance from the debt collector company, just in case that the debtor sues both the bank and the debt collector company. The insurance is normally known as “Errors and Omissions Insurance” and morally upright debt collector companies will have the insurance to serve as a protection.