Introduction
Everybody would like to live his or her life to the fullest. Even the poorest people would like to enjoy their life at one time or another. This has made most of them look for all means possible to see that they have acquired all that they have ever wished to have in their life. This does not go without its limitations. As many low earning citizens are looking for means to acquire some of these goods, varied organizations have cropped up in the name of trying to help them realize their dreams. They do this by granting loans or giving items on credit that they are expected to settle in future. This implies that they will have to repay the loan with some interest.
Main Body
Most of these companies take the opportunity of low-income earners who are not aware of terms and conditions the services offered. This eventually leads to most of them failing to repay their debts or repaying with many difficulties. Some companies repossess their goods regardless of whether they had received partial payment from their customers. It is the responsibility of these companies to have prior discussion with these people to ascertain that the client will be able to repay the credit. They need to explain clearly all the conditions of their operations to their clients as well as the repercussions of failing to repay the debts. This will help customers in making wise decisions. With most of the companies being able to tell which customer can be able to repay their loans, they need only to offer loans to those customers they know they will be able to repay. For those not capable of refunding, they need to explain to them the cost of not refunding to eliminate the notion of being discriminated against. The companies also need to always disclose the interest rates and other charges that accompany their loans to help customers decide whether to proceed and take the loan. They also need to update customers regularly on status of loan repayment. Unfortunately, most of these companies have taken this chance to exploit their customers. For those who feel they cannot bear with the loans they had borrowed and request for cancellation, the companies keep on extending the cancellation period to ensure that they pay more interest (Hinds, 2008, para. 1-5).
Byrider’s are not acting ethically. They take the advantage of their customers not knowing their terms of granting loans to exploit them. They have made some people part with more than twice what they had borrowed. This appears to be conspiracies within the company of making their deals appear attractive in order to trap people in their most hopeless moments. It is their moral responsibility to help those in need rather than exploit them. The company has also taken the opportunity of their clients being illiterate to exploit them. They rate their interest at a flat rate leading to the customers paying more. This is because they charge each month’s interest on the original amount they had lend the customer regardless of whether the customer has settled part of the loan. The company lacks transparency in its mode of operations by failing to disclose to the customers how they rate their interest. Instead, they seek to open more branches to exploit these innocent customers. The company being in position to tell those customers that are capable of repaying their loan, it is supposed to educate customers on the consequences of engaging in deals they can not be able to manage. On the contrary, they go on to offer credits to them knowing that they will be unable to repay their loans on time so that they can charge them extra fee for late repayment. This is unethical as given the fact that, most of these customers opt to get these loans on realizing that they cannot afford what they want on cash. The company breaches the trust that customers have in them as they go for these loans (MacDonald, 2004, Par. 1-3).
The issue of lending has been condemned even in the bible. It is unethical for by riders to exploit customers instead of helping them meet their financial requirements.. According to religious beliefs, the exercise of lending would be ethical if and only if the lender is sincerely determined to help the borrower meet his or her needs. For by riders most customers find themselves trapped in circle debts rather than moving towards self-sufficiency. What is the way forward out of this stalemate?
Customers are supposed to be accountable of the decisions they make after knowing the effects of taking loan, failing to repay the loan on time as well as failing to repay the loan. Most of the customers engage in acquiring these loans due to their inability to finance their needs. As most of the financial institutions grant their loans at high interest rates, most of the low income earners are incapable of accessing these loans. As a result, these people turn to companies that are willing to offer them favorable terms of achieving their needs. With most of the customers not being aware of the repercussions of acquiring loans from these companies, there is need for them to be protected from exploitation by these opportunists. The companies advertise themselves in a way that makes these customers fall victims of exploitation. This means that, customers are not to be blamed for their actions as most of them fall victims unknowingly. This underlines the need for these companies to always organize for customers’ counseling before granting them loans. By so doing the customers will be able to understand the company’s terms and conditions of granting loans. Afterwards, they can make decisions on whether to apply for loans or not depending on whether they will be able to meet the set conditions. At times, some customers might fall victims of not managing to repay the loans and hence being charged according to the company’s terms. As if this is not enough, the same customer might go to another company and borrow another loan. Such customer needs to take full responsibility of his or her actions (Advantage financial.com, 2009, Par. 2-5).
Conclusion
Credit-risk customers deserve not to be charged high interest rates. Most of these customers turn to these companies for help due to their financial constraints. Charging them high interest rates leads to them being unable to repay their loans. By this, most of them end up getting into more problems than they were initially. Most of these companies justify their acts by claiming that the interest is aimed at compensating for those loans that go unpaid. The government needs to come up with rules that will regulate the rate at which the companies should charge their interest. This should be made in a way that the companies do not incur losses and at the same time the customers are not exploited.
Reference
Advantage financial.com. (2009). Ethics in Mortgage Lending. Web.
Hinds, D. (2008). Beating the Debt Trap. Web.
MacDonald, G. J. (2004). Religious ethics clash with loan practices. The Christian Science monitor. Web.