BACK in 2002, V. Jeya and her husband took a bank loan to renovate their home in Kedah.
Several months later, tragedy struck her husband passed away.
With four young daughters to care for, Jeya was grateful that the Mortgage Reducing Term Assurance (MRTA) he bought was sufficient to cover their home loan of RM30,440 (S$12,111).
"The bank told me the insurance was enough to pay up the loan, and everything was settled," says Jeya, 47, a systems executive. Or so she thought.
In 2011, when attempting to get another bank loan to buy a car, Jeya (who had by then moved to Klang) was told she had an outstanding amount of RM10,000 with the local bank.
"I asked them how this was possible, since the bank had confirmed that my loan was settled by the insurance in 2002.
"They said my oustanding loan was RM4,000 in 2002, but had now ballooned to RM10,000 with interest. The bank said they would investigate the matter. Interestingly, though, they didn't have any documents on my loan. I had to provide them with my copies," she says.
Then in May 2012, she was informed by her tenant in Kulim that the house had been auctioned off.
"When I approached the bank in Kulim, they told me they had nothing to do with the auction, and suggested that I check with their headquarters (HQ). When I checked, I was told to file a report with Bank Negara, so I did," she says.
A week later, the bank confirmed that her house had been auctioned off for RM56,000. They issued her a cheque for RM29,500, after deducting what was due them.