Customers are being urged to ensure that contracts for products and services being obtained, especially with financial institutions, are fully understood before entering into any agreement.

This call is coming from Dolsie Allen, chief executive officer of the Consumer Affairs Commission (CAC), who said: “Whether it is a micro credit lending agency, commercial bank, credit union or a mortgage, ensure that you understand fully what you are getting into. Ask all the important questions and ask them for a summary of all the critical points, in terms of that contract.”

Allen pointed out that chief among the pertinent details consumers need to query is interest rates.

An interest rate is an amount a lender charges a borrower and is a percentage of the principal – the amount loaned.

Allen encouraged consumers to ask questions such as: “What are the other fees; how long is the loan for; what is my monthly payment, what happens in the event, for some reason, that I cannot make the payment this month, what do I do, what are some of the penalties?”

The CEO further noted that being “desperate for the money” is often the reason consumers accept information they are told, without thinking or understanding.

“We all know the contracts are normally very long and the fine prints are there, and you just can’t bother with the reading. What we are saying [is], take the time out, ask for basic things,” Allen said.

She encouraged consumers who have encountered financial challenges not to hide away from their creditors.

“That does not help at all. You need to go in and have a discussion with your credit provider,” Allen emphasised, adding that they should also follow up by writing, as officers change from time to time.

To increase financial literacy, persons may connect with the CAC on Facebook, Instagram and Twitter, where tips are posted.

The CAC is an agency of the Ministry of Industry, Investment and Commerce. Its role is to enforce the Consumer Protection Act and facilitate ethical behaviour in the marketplace, between vendors and consumers.