The Competition Authority of Kenya (CAK) has ordered the Family Bank to pay sh1.5 million to a former employee for consumer rights violations.
According to the authority, the bank’s former employee filed a complaint with them, seeking help after the bank failed to give her the required 20% discount on a loan she took.
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.
The bank was set to auction a property to cover for the loan, however she secured a court injunction and stopped the sale.
“She further alleged that in November 2017, Family Bank debited and overdrew her account with Sh399,800,”
“Upon inquiring, she was informed that the amount would be used to settle legal fees Family Bank would incur in the court proceedings,”
“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,”
“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.” CAK said in a statement.
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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,”
“Refund the complainant Sh399,800, 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 added.