An Eximbank branch in HCM City. — Photo courtesy of the lender

A local lender has announced it will not be collecting over VNĐ8.8 billion ($356,000) in credit card debt, which had surged from an initial amount of VNĐ8.5 million over the last decade, in response to public outrage and a directive from the central bank.

Speaking at a press conference on Thursday, Nguyễn Hồ Hoàng Vũ, deputy general director of Vietnam Export-Import Commercial Joint Stock Bank (Eximbank), said: “This case of credit card debt is unprecedented, and Eximbank will not be requiring the customer to pay the amount of VNĐ8.8 billion.”

Vũ said the bank’s interest and fee policies regarding credit cards are established based on market practices, competition factors, and customer needs.

“In this particular case, the debt collection staff did not follow the correct process in determining the interest and fee levels,” he told the press conference.

Eximbank leaders have already met with the customer in Hà Nội to reach an agreement that is fair to both parties, he said.

However, the exact amount that the customer will need to pay was not disclosed.

Võ Minh Tuấn, director of the central bank’s branch in HCM City, said while several commercial banks, including Eximbank, use compound interest to calculate interest for credit card debt, the interest amount in this case is “shockingly unusual.”

Lenders are asked to fully inform customers about interest rates, fees, and account balance fluctuations related to credit card debt in a timely manner.

He has also asked lenders, including Eximbank, to review their policies and procedures to avoid similar incidents in the future.

An employee at a state-owned Bank for Investment and Development of Vietnam (BIDV) branch in HCM City, who declined to be named, told Việt Nam News that the lender’s methods of calculating interest, even including compound interest, for the credit card debt are “very unusual” compared to other banks in the market.

The extended duration of the debt spanning over a decade also raised concerns about the lender’s practices and procedures, she added.

Last week, a customer from the northern province of Quảng Ninh, received a notice from Eximbank that he owed nearly VNĐ9 billion as a result of using his credit card to make two small purchases totalling VNĐ8.5 million in 2013.

Following the scandal, there has been a significant rise in customers closing their credit cards and checking for undisclosed debt at Eximbank and other banks.

Several Eximbank customers have also expressed concerns about account management fees being charged by Eximbank even when accounts are inactive.

Users are recommended to carefully learn credit card terms and debt management policies before signing up for a card, especially considering the recent scandals in the banking sector.

In a previous legal case, Eximbank in 2019 was ordered by a HCM City court to repay a customer whose deposits were stolen by its employee.

It ordered the bank to return the customer the principal amount deposited of VNĐ245 billion ($9.9 million), as well as calculated interest.

In recent years, there have been multiple scandals, with depositors occasionally filing complaints about their deposits “mysteriously disappearing” after depositing them at commercial banks, local media reported.

When such a case occurs, some local banks have been known to avoid taking responsibility for protecting their customers, raising concerns about the safety of deposits in the banks, experts have warned.

Their typical response to customers is “wait for a decision from the police”, a process that can be lengthy and slow in resolving the case, experts noted. — VNS