Standard Bank Malawi has been fined several million kwacha for unfair banking practices after the Competition and Fair Trading Commission (CFTC) found fault with the way the bank dealt with a customer’s loan.
The penalty forms part of a wider crackdown that saw six companies punished and ordered to refund consumers millions of kwacha over unfair trading practices and consumer abuse.
FDH Bank received the biggest penalty of all after the commission found what it described as misleading conduct involving a Keyman insurance policy linked to a business loan.
According to the CFTC, Standard Bank unilaterally extended a three-year loan to five years following a system error, resulting in deductions beyond the agreed repayment period.
The commission later imposed a K100 million penalty on the bank for failing to disclose material information relating to the loan.
FDH Bank was fined K200 million after the commission found that insurance terms had been altered without disclosure and that unexplained deductions had been made from a customer’s account.
CFTC has since ordered FDH to refund K120.2 million plus interest, reverse overdraft charges and repay K200,000 deducted in error.
Fertiliser supplier Nitro Phos Limited was fined K50 million after supplying defective CAN fertiliser that allegedly caused crop failure among farmers in several districts.
CTS Courier Services received a K5 million penalty after losing customers’ goods worth K815,000 and failing to compensate them, while Modern Dry Cleaners was fined K3 million for damaging clothes valued at K1.46 million.
CFTC Chief Executive Officer Desmond Kaunda said the decisions demonstrate the commission’s commitment to protecting consumers and enforcing fair trading laws.
