The Competition Authority of Kenya (CAK) has ordered Family Bank to pay its former employee Sh1.4 million for consumer rights violations.
CAK accuses the lender for failing to offer the ex-worker a 20 per cent discount on a loan she took upon full payment as well as debiting and overdrawing her account with Sh399,800.
The Bank’s former employee had lodged a complaint with the Authority seeking help on the matter.
The regulator says that the complainant exited the bank after 11 years through early retirement, but after one year, was unable to service the loan due to financial difficulties. Subsequently, it adds, the property was put up for auction in October 2017.
However, she secured a Court injunction to stop the sale, allowing her to explore the option of securing a buyer, CAK explains. “She further alleged that in November 2017, Family Bank debited and overdrew her account with Sh399,800,” CAK said in a statement.
ALSO READ: Cost Of Exporting Fresh And Dry Produces Drops 62 Per Cent
“Upon inquiring, she was informed that the amount would be used to settle legal fees Family Bank would incur in the court proceedings,” it added.
Despite her exit letter indicating that she was entitled to a 20 percent waiver; she was later informed about her ineligibility on the argument that the relief was only applicable if triggered within 30 days from the exit date.
She contested this position, the regulator state, arguing that her exit letter did not provide for the one-month ultimatum.
“In a response to the complainant’s inquiries, Family Bank indicated that it strictly adheres to staff termination terms, and that they only grant 20 per cent waiver on outstanding balances if they are settled within the 30-day window,” CAK adds.
“Upon settling the outstanding loan amount in full, the complainant revisited the waiver issue with Family Bank and was informed that it could not be granted. The reason provided was that the facility was in distress.”
Following an investigation, CAK found that the bank had abused its higher bargaining position. ”Apply and refund the 20 per cent waiver on the complainant’s facility totaling to Sh1,015,804.20, being the discount that would otherwise have been applicable on the loan if settled in full,” it added.
“Refund the complainant Sh399,800, being the excess amount debited from her account to the bank’s legal fees as a result of the court proceedings initiated by the complainant;” CAK says the lender has complied with the order
SOURCE: Capital business
