AFTER grappling with a slew of technical glitches, which led to the bank being sued by nine individuals and three companies on Feb 28, CIMB Bank Bhd has found itself embroiled in yet another reputational damaging incident.
On March 31, protests were held simultaneously at five locations across the country in support of school cleaner Tamil Selvi who was allegedly a victim of misconduct by CIMB Bank over her housing loan.
Organised by Parti Sosialis Malaysia (PSM), the event took place outside five CIMB Bank branches in Ipoh, Kuala Lumpur, Johor Bahru, Seremban, and Penang.
In 2001, Tamil Selvi and her late husband S. Chirtanthan had taken up ahome loan amounting to RM73,700 from Bumiputra-Commerce Bank Bhd (which later assumed the name CIMB Bank Bhd) to buy a house in Menglembu, Ipoh, Perak. At the same time, the couple had also purchased a mortgage reducing term assurance (MRTA) which expires only in 2026.
PSM deputy president S Arutchelvan who attended the protest in Kuala Lumpur claimed that Tamil Selvi’s house in Ipoh was auctioned off by CIMB Bank in October 2020 for RM140,000 after alleged failure in committing to her monthly housing loan repayment.
“(Tamil Selvi) paid her loan every month for 15 years until Chitarthan had a stroke and lost his job in late 2019,” he said in the party’s news portal.
“They (the couple) amassed three months of arrears as Chitarthan lost his source of income. In February 2020, the Social Security Organiation (SOCSO) declared Chitarthan as incapable to work and approved his invalidity pension.”
Tamil Selvi who was earning RM1,200 a month had requested the Menglembu CIMB branch to reduce her loan quantum from RM700 but her request fell on deaf ears. Later, she submitted her husband’s status as per his SOCSO’s documents.
At the same time she enquired about the use of the MRTA to settle part of the loan. But the bank staff said they couldn’t trace the MRTA documents in the system. The MRTA could have more than covered their arrears.
Chain of run around
At the height of the COVID-19 pandemic in September 2020, the couple received an Announcement of Sale letter which Tamil Selvi took the letter to CIMB Menglembu for clarification.
The bank officer herself was surprised at the auction notice, saying that as the arrears was just RM2,567, it was unlikely for the bank to auction her property. She advised Tamil Selvi to appeal and even helped to forward her appeal to the bank’s headquarters (HQ).
As there was no reply, Tamil Selvi and Chitarthan considered the matter settled and continued paying their instalments.
CIMB had continued accepting the monthly instalments right until Chitarthan’s death in February last year. Five days after his death, Tamil Selvi went to the CIMB Menglembu to inform the bank of her husband’s death.
After consulting its HQ, the bank’s staff told Tamil Selvi that she need not make any more payments as the house had been completely paid for.
But on the same night, a CIMB Bank HQ officer called and broke a shocking news to Tamil Selvi – that she has to vacate her house as it has been sold off in an auction, and that she has to furnish her bank account details for the bank to deposit the balance money from the sale.
Then, ten days later at end-February 2021, Tamil Selvi received a letter from CIMB Bank HQ saying that she had “completed her loan tenor and fully settled all the outstanding (loan) with the bank.” It confirmed what the Menglembu office had told her – that there were no more payments to make for the house.
This confirmed that the house was still theirs, and contradicted the news that it had been auctioned to someone else.
But in the coming days Tamil Selvi was shocked and confused to find out that the CIMB had actually sold her house in an online auction in October 2020 for RM140,000.
Getting to the bottom of blunder
The moral of this story is not about CIMB Bank failing to be sympathetic to the plight of a B40 bank customer but rather how this blunder could happen in today’s highly regulated banking environment.
To begin with, the chain of miscommunication between the bank’s headquarters, branch and Tamil Selvi is rather baffling whereby one is made to wonder if this is a system error (failure of the computer to capture the loan payment transaction or store the necessary documents ie. MRTA purchase or Chitarthan’s death certificate) or this is indeed an ‘honest’ human error.
CIMB Bank has to swiftly initiate an initial probe into this matter for it owes Tamil Selvi a big apology for the trauma that she has been subject to as opposed to her being a B40 customer (although this is also a welcome goodwill gesture as part of the bank’s corporate social responsibility exercise) if indeed she has been a victim of a ‘run around’.
After all, to echo what PSM said, CIMB Bank “has obviously committed a major blunder” by:
- Initiating the foreclosure/auction process for a failure to pay for about three months because of a serious illness;
- Initiating the auction process in the middle of the COVID-19 pandemic;
- Failing to initiate the MRTA application when informed of Chitarthan’ SOCSO disability award; and
- Giving incorrect advice when Tamil Selvi went to the branch with the Announcement of Sale letter. – April 4, 2022
