Vol 19, 2016

Regular Articles

A Study on the Financial Consumer Protection in Malaysia with Specific Reference to the Financial Services Act 2013
Ibtisam @ Ilyana Ilias, Universiti Teknologi MARA
Naemah Amin, International Islamic University Malaysia
Page 1-14   |      Download PDF   |   ABSTRACT PREVIEW


In recent times many countries across the world have become increasingly concerned on the protection of financial consumers. Malaysia, in that regard has passed the Financial Services Act 2013 (FSA) to fill in the lacunae in the existing legal framework. The objective of this study is to appraise the key provisions of the FSA with reference to financial consumer protection. Adopting a doctrinal and content analysis methodology, the relevant provisions of this statute, as well as related legal articles have been carefully examined. The findings of the study revealed that some principles of financial consumer protection to a certain extent have been successfully tackled, especially those on the redress mechanism with the establishment of the Financial Ombudsman Scheme (FOS). Nevertheless, being at an infancy stage, more comprehensive provisions on the remaining fundamental principles need to be developed. Therefore, several recommendations have been proposed for further improvements. This will help in ensuring a more inclusive, standardized and effective consumer protection regime. This study hopes to significantly contribute in improving the current legislative framework governing financial consumers in Malaysia. 

Financial consumers, Consumer protection, Financial services, Malaysia

Consumers’ Awareness and Practices Towards ‘Exclusion Clause’ and Its Position Under Malaysian Law
Elistina Abu Bakar, Universiti Putra Malaysia
Naemah Amin, International Islamic University Malaysia

Page 15-26   |      Download PDF   |   ABSTRACT PREVIEW


The aim of this paper is to explore the adequacy of contract law, common law and the Consumer Protection Act 1999 (CPA) as the tools of consumer protection in dealing with exclusion clauses. The underlying philosophy is that consumers are free to enter into contracts and therefore must take care of their own interests. This principle, which is based on the assumption of equal bargaining power between parties, though, is not appropriate when consumers are involved. This is because in most consumer transactions, the natural tendency is that the consumers have no option except to abide by the contractual terms determined by the suppliers. The content analysis is carried out in order to analyse Malaysian law which include the analysis on the Contract Act 1950, the common law as well as the Consumer Protection Act 1999. A survey using questionnaires was carried out among 400 consumers in Klang Valley to explore their awareness and practices towards exclusion clauses. The analysis of the laws demonstrates that the law of contract, common law and the CPA are inadequate in giving comprehensive protection to consumers on the issue of exclusion clauses. In addition, the results of the survey show that only 41.8% of the respondents aware of the existence of such clauses in their dealing with the suppliers and 50.8 % of the respondents responded that they did not understand the implication of such clause. In total, 54.3% of them stated that they would still sign the document even though they were already aware of the exclusion clauses or any other unfair contractual terms. Thus, it is submitted that there are two solutions to this problem. The first one is to educate the consumers so that they are more aware about exclusion clauses and the second one is for the Parliament to take steps to legislate specific legislation dealing with exclusion clauses especially in consumer transactions. 

Exclusion clauses, Standard form contract, Consumer protection, Legal protection

Determinants of Employee Perception on Financial Well-Being in Putrajaya
Nuradibah Mokhtar, Husniyah Abd. Rahim, Universiti Putra Malaysia
Page 27-52   |      Download PDF   |   ABSTRACT PREVIEW


This study examines the relationship between financial stress, work environment, locus of control, financial behavior and financial well-being among public employees in Putrajaya. A survey was carried out to acquire data from 374 public employees using a self-administered on-line questionnaire, utilizing multistage random sampling. Results showed that financial stress (r = -0.643**, p < 0.01), work environment (r = 0.247**, p < 0.01), locus of control (r = 0.395**, p < 0.01) and financial behavior (r = 0.363**, p < 0.01) have significant relationship with financial well-being. It was discovered that respondents who were experiencing lower financial stress, have positive work environment, locus of control and financial behavior tend to have a better financial well-being. Financial stress (beta = -0.543, p < 0.01), work environment (beta = 0.080, p < 0.01), locus of control (beta = 0.132, p < 0.01) and financial behavior (beta = 0.244, p < 0.01) have significant influence on respondents’ financial well-being. Based on the results, financial well-being can be enhanced through the decreased of the employees’ financial stress and increasing of their work environment, locus of control and financial behavior. 

Financial well-being, Financial stress, Work environment, Locus of control, Financial behavior

Factors Affecting Retirement Confidence among Women in Peninsular Malaysia Government Sectors
Teo Tze Juen and Mohamad Fazli Sabr, Universiti Putra Malaysia
Page 53-68   |      Download PDF   |   ABSTRACT PREVIEW


A majority of employees, particularly women, are hoping for a retirement life that is relaxing and stress-free. In reality, it is almost impossible for these employees to achieve this dream lifestyle. It is this reason that this study is done where it is aimed to uncover factors affecting retirement confidence among women employees in Peninsular Malaysia government sectors. A total of 447 women employees in Peninsular Malaysia government sectors participated in this study. Research data collected from this study revealed that marital status, education level, money adequacy, saving motives, financial literacy, and financial management practices are significant predictors for retirement confidence among women government servants. In essence, women employees in government sectors who are married, achieve tertiary education, have adequate money and are able to save-up for retirement. They are financially literate, able to apply healthy financial management practices and tend to have greater confidence ensuring a secured retirement life. 

Retirement confidence, Factor, Women, Government sectors, Peninsular Malaysia

Kajian Perhubungan antara Identiti Diri dengan Norma Subjektif terhadap Tingkah Laku Sisa Sifar dalam Kalangan Pengguna di Lembah Klang
Fazlina Akmal Mustafa, Afida Mastura Muhammad Arif, Elistina Abu Bakar, Universiti Putra Malaysia
Page 69-86   |      Download PDF   |   ABSTRACT PREVIEW


Solid waste management has become one of Malaysia‟s critical environmental issues. The increase of generation of waste and the high cost in its management is a challenge to the authorities. The study is aimed at determining the level of self-identity and subjective norm towards zero waste behaviour among consumers in Klang Valley. A total of 400 respondents were selected through multi-stage random sampling in this study. The survey was conducted using self-administered questionnaire to obtain information on the respondents‟ socio-demographic background, self-identity, subjective norms and zero waste behaviour. Research findings show that respondents‟ level of self-identity, subjective norms and zero waste behaviour were moderate. The results show that zero waste behaviour significantly correlates with self-identity (r=0.490*, p<0.01) and subjective norm (r=0.463*, p<0.01). The variables used in this study contributed 29.7% towards the model. Multiple regression result found that self-identity is the most significant factor to influence consumer behaviour towards zero waste. Therefore, appropriate effective strategies to build a strong self-identity towards environment should be developed by the relevant authorities to enhance zero waste behaviour among the consumers. 

Self-identity, Subjective norm, Zero waste behaviour

Giving Behaviour: Who Donates Cash Waqf?
Syadiyah Abdul Shukor, Universiti Sains Islam Malaysia
Intan Fatimah Anwar, Hisham Sabri, Sumaiyah Abd Aziz, Avylin Roziana Mohd Ariffin

Page 87-100 |      Download PDF   |   ABSTRACT PREVIEW


Malaysia ranked 10th out of 145 countries in The World Giving Index 2015. This study explored whether cash waqf donors/non-donors can be distinguished using demographic variables and their perceptions of cash waqf. Data were collected through survey questionnaires in Selangor/Klang Valley, Malaysia. Based on 386 samples, the results indicate that demographic variables and individual perceptions on cash waqf are useful to explain and predict donors/non-donors. Findings from this study will help awqaf institutions in their effort to develop some marketing plans that can encourage Muslim to participate in cash waqf. 

Giving behaviour, Islamic finance, Cash waqf

Gold Investment Intention among Urban Public Sector Employees in Malaysia
Ahmad Fauzi Abdul Wahab, Universiti Putra Malaysia
Husniyah Abdul Rahim, Mohamad Fazli Sabri, Mohd. Amim Othman, Roziah Mohd. Rasdi

Page 101-114   |      Download PDF   |   ABSTRACT PREVIEW


Asset accumulation has focused intensely on investment as a tool for elevating income. Gold investment has gained the attention among individuals due to the introduction of new forms of gold investment products. This study applied the Theory of Planned Behaviour to include the construct of gold investment literacy. The potential factors such as attitude, subjective norms, perceived behavioural control and literacy regarding gold investment are determined their significance of influence on gold investment intention. A total of 254 respondents among urban public sector employees in Peninsular Malaysia sampled via a multistage random sampling responded to self-administered questionnaires. Statistical analyses demonstrated moderate levels for gold investment literacy, subjective norms, perceived behavioural control, attitude and investment intention. Multiple regression analysis revealed that gold investment attitude, subjective norms and perceived behavioural control significantly predicted employees’ intention to invest in gold with moderate explained variance (R2 = 0.564) by the predictors. Gold investment literacy however, was not significant in influencing gold investment intention. These findings are useful information that may be incorporated into employees’ development program aimed to improve personal financial behaviour of employees. 

Gold investment literacy, Subjective norms, Perceived behavioural control, Gold investment intention

Low-Hanging Fruits: Impact of Socio-Economic and Behavioural Characteristics on Consumers’ Willingness to Pay
Norzalina Zainudin, Selangor International Islamic University College
Chamhuri Siwar, Er Ah Choy, Norshamliza Chamhuri, Universiti Kebangsaan Malaysia

Page 115- 126   |      Download PDF   |   ABSTRACT PREVIEW


Energy efficiency is generally recognized as the “low-hanging fruit in a country’s pursuit of energy security and low carbon economy. The promotion of energy efficient products at home is considered as a cost effective way in reducing energy consumption for indoor building. This research aims to examine consumer willingness to pay (WTP) in respect to energy label air-conditioner products. For this purposes, study discussed two main hypotheses which relate to socio-economic and behavioural characteristics. Result from the ordered logit model shows that income, household’s size, perceived of product advantages and perceived behaviour control negative have a significant impact on consumers’ willingness to pay. The findings of the study will contribute to the knowledge on how individual values for the environmental product innovation by making pragmatic policy recommendations that formulate strategies for addressing bottlenecks in accessing energy services by consumers. Understanding the consumers’ willingness to pay will provide invaluable insights into consumer oriented market segment with new avenues for marketers’ thought into green marketing strategy. These findings also would assist Malaysian green innovation product firms to successfully market in Malaysia. 

Socio-economics, Behavioural characteristics, Energy efficiency, Willingness to pay

The Effect of Recover Satisfaction, Severity and Psychological Contract Violation Toward Boycott in Halal Violation Incident
Nor Asiah Omar, Universiti Kebangsaan Malaysia
Nordiana Ahmad Nordin, Universiti Malaysia Sarawak
Muhamad Azrin Nazr, International Islamic University Malaysia

Page 127-142   |      Download PDF   |   ABSTRACT PREVIEW


Understanding halal violation effect is important as it can harm product through negative behaviors. This study aims to investigate the effect of psychological contract violation (PCV), recovery satisfaction and severity of violation on boycott. Furthermore, this study will also examine the moderating effect of PCV in the relationship between recovery satisfaction and severity of violation on boycott. A total of 212 questionnaires were collected from consumers who were aware and/or had experienced the violation of a halal product in Malaysia. A hierarchical linear regression analysis was used to test the research model. This study found that PCV and recovery satisfaction have a significant influence on boycott. The contribution of this study is obvious as the resulting outcomes can be capitalized as a guideline for managers to design recovery action towards halal violation incident. This study is among the first few attempts towards investigating halal violation and psychological contract violation effect. 

Recovery satisfaction, Severity, Psychological contract violation, Boycott, Halal

Mediating Effect of Self-Coping Mechanisms on Associations Between Financial Practices and Financial Security of Female-Headed Households
Siti Yuliandi Ahmad, Universiti Putra Malaysia
Mohamad Fazli Sabri, Husniyah Abd Rahim, Syuhaily Osman

Page 143-1
60   |      Download PDF   |   ABSTRACT PREVIEW


Coping process involves contingency actions of individual to alter their cognitive and behaviour to cope with stress encountering events in life. Self-coping mechanisms were examined further as mediating effect between financial practices and financial security among female-headed households in Malaysia. A model was then constructed based on Characteristics Theory, Cognitive of Stress and Coping Theory. A multi-stage random sampling was executed and a self-administered survey was executed to collect data from 600 respondents from six single mother associations at every zone in Malaysia. A structural equation modelling using AMOS software was used to examine mediating effect of self-coping mechanisms in a relationship between financial practices and financial security of female-headed households in Malaysia. The findings support that a significant relationship exists between indirect and mediating models. The study revealed that there is a partial mediating effect of self-coping mechanisms between financial practices and financial security. The role of self-coping mechanisms is crucial to grasp a better understanding of how financial practices and financial security are related to improving the living standards of female-headed households. Implications and limitations of the study are dissussed further. 

Self-coping mechanisms, Financial practices, Financial security, Female-headed households