NST Leader: Consumer Credit Bill brings order to Malaysia's spending madness
Add to these essentials such as food and beverage, rental, Internet data and leisurely pursuits, consumer spending in Malaysia hit a RM258.6 billion in the first quarter.
Here's the paradox: such heavy spending is why small businesses survived during Covid-19 and through the post-pandemic years. But this same "gung-ho" spending is also why prices have inflated, thus the desperate call for government anti-inflationary measures and financial assistance.
This has compelled the government to put together an interim package of financial goodies, effective Aug 31 to Dec 31. Top of the package is the one-off RM100 for all Malaysians above 18 under the Sumbangan Asas Rahmah initiative.
There's also a six sen reduction in the price of RON95 under fuel subsidy reforms, deferred toll hikes, and expansion of the Madani Rahmah Sales programme allocation to RM600 million.
Lest critics deem it a strain on government debt, it's worth noting that the initiative is not new. It was implemented years ago in the name of "economic stimulation".
Still, many Malaysians are indifferent to sensible financial management, spending needlessly, such as the obsession of changing cars year after year.
A new safeguard is on the horizon: the just-passed Consumer Credit Bill 2025 (CCB), designed to protect against risks from uncontrolled credit and unethical lending practices.
In the dizzying digital economy that elevates consumerism and fuels unrestrained spending, a new law had to be formulated to regulate credit-related businesses and services, compelling fair conduct.
Credit providers will soon be mandated to ensure transparency in charges and adopt professional guidelines for debt collection and dispute resolution.
A key provision of the bill is the regulation of instant loans and the increasingly popular "Buy Now, Pay Later" (BNPL) schemes.
BNPL has gained such traction that even cash-strapped Malaysians have been able to snap up My Chemical Romance concert tickets. It means that people who couldn't afford the tickets bought them anyway. The downside? More debt.
The CCB is hoped to be the "silver bullet" in curbing extreme consumerism — particularly among non-bank credit providers, including BNPL operators, leasing firms and factoring companies.
It also extends to debt collection agencies, many of which have been running with little to no official oversight.
The CCB will require full disclosure of credit terms, fees and hidden charges, while prohibiting misleading advertisements, undue pressure and deceptive credit tactics.
It will also ban harassment, threats and public shaming of borrowers. Malaysians will soon be nudged to cut trivial spending and adopt more sensible personal financial management. The CCB will see to it.
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