What are the basic terms and conditions of a finance product or service that a finance company shall disclose prior to signing a finance agreement?
A finance company must, prior to the conclusion of a finance agreement, disclose and clarify all details related to the requested finance product or service to customers and provide them with a summery of the main terms and conditions pertaining to the finance product or service, including, for example:
- Fees, commissions, administrative service costs and the annual percentage rate.
- Finance repayment period.
- Early repayment procedures.
- Finance agreement termination procedures.
- Withdrawal right procedures, if any.
- Obligations and duties of each party under the agreement.
- Any item that can be modified by the company after the agreement comes into force.
- Any restriction or condition that may harm the customer’s interests.
- Procedures for handling complaints.
What are the procedures that a finance company should follow upon receiving complaints from customers?
Upon receiving a complaint, the finance company must:
- Contact the customer through guaranteed means of communication to confirm receipt of the complaint and inform the customer of the required documents (if any) within 5 business days.
- Provide the customer with the complaint number and contact information through which they can follow up the updates of the complaint.
- Respond to the customer with the results within a period not exceeding 10 business days from the date of receiving the complaint.
- Retain and document the communication channel used for the complaint and maintain its records.
What is finance rescheduling?
When a customer’s salary is decreased, their monthly payment amounts are reduced, resulting in an extension of the repayment period. In this case, the repayment period is rearranged. This is called finance rescheduling.
Does the finance amount decrease if the customer has a credit card?
Yes, because credit cards are included in the calculation of customers’ credit limit, and with their commitment to paying their credit card dues, their chances of obtaining approval of a finance application will be improved.
Is the customer required to update their personal information given to the finance company?
Customers must constantly update their personal details that include contact information (email address, P.O. Box, etc.). They bear full responsibility for providing authentic information and for the consequences of not providing the finance company with such required information.
What is the finance company’s responsibility for the conduct of employees assigned to roles that include sales and marketing of finance products?
In order to ensure that good quality sales and marketing services are provided to all customers, a finance company must publish a clear code of conduct with customers and ensure that each employee receives a copy.
What are the finance company’s responsibilities towards its customers upon dealing with them or selling to them?
When selling or using any service or product, the finance company must deal without prejudice with customers and must not put pressure on them for any reason.
Is the finance company entitled to collect fees from customers upon their request of a detailed account statement?
Upon a customer’s request, the finance company must provide a detailed account statement without any fees and without delay, containing all fees, term cost and applied costs in addition to any additional costs in case of default or early repayment.
How many times can a customer receive a free-of-charge report showing their payments made and the remaining payments?
A customer is entitled, on a quarterly basis, to request an electronic or paper report showing the payments made and the payments remaining from the finance company.
What are the actions that the finance company is prohibited from taking to recover the amounts due from customers?
Under the finance agreement, the finance company does not have the right to take any illegal or unlawful actions to recover any amounts due to it.
What financial obligations should a customer disclose upon the request to obtain a finance product, and what is the finance company’s responsibility towards them?
In order to ensure the customer’s financial capability to pay finance amounts in the future, the customer must disclose all of their financial obligations with any entity. Through this information, the finance company can ensure the product suitability for the customer’s financial position and needs.
When should a finance company issue a clearance letter for the customer in the case of full and final repayment of the finance?
The finance company should provide a clearance letter to the customer within seven business days from the date the final payment is made, and it must update the customer’s credit record at the Saudi Credit Bureau (SIMAH).
If a finance company mistakenly collects amounts from a customer, what is the action to be taken?
The finance company must immediately return the amounts collected my mistake to the affected customer’s account without having to receive any claims from the customer. These amounts are not to be used by the finance company.
What should a finance company consider regarding death cases before the conclusion of an agreement?
The finance company must inform the customer, prior to signing an agreement, of the regulations and procedures followed with regard to finance agreements in the case of death of the person who receives finance (God forbid).
Does the finance company have the right to reject granting finance to a customer?
The finance company has the right to reject a customer’s request for a finance product, provided that it must inform the customer of the reasons for rejection through guaranteed means of communication, within five days from the date of rejection.
Is the company entitled to change the amount of fees and commissions to be paid by customers after singing the finance agreement?
No, the company does not have the right to do so.
If a company decides to make changes in the agreement, what are the customer’s rights and the company’s obligations towards the customer?
In the event that a finance company needs to change or amend any of the agreement items, it must notify the customer 30 days in advance. The customer has the full right to object to that change within a period of 10 days from the date of receiving the notification.
What are the finance company’s responsibilities towards humanitarian conditions of its customers?
If the company encounters customers who are facing an urgent financial difficulty or distress, it should deal with them with full understanding and consideration of their humanitarian situations.
Does the finance company has the right to know the purpose of obtaining finance?
The finance company must learn the reason or purpose behind the customer's request for finance and have it recorded.
Which authority is supervising finance companies?
The Saudi Arabian Monetary Authority (SAMA) supervises finance companies licensed to provide services in Saudi Arabia; it is the only body authorized by law to do so.