Vivo’s ‘0% Interest’ Installment Plan Draws Questions Over Extra Charges

A promotional “0% interest” installment scheme offered by Chinese smartphone brand Vivo in Bangladesh is facing questions after customers were found to be paying up to around 10 percent more than the devices’ cash prices.

A visit to a Vivo Bangladesh showroom at Police Plaza in the capital on Monday (September 7) found that customers purchasing smartphones under a nine-month installment plan were required to pay additional charges despite the promotion being advertised as “0% interest.”

The 8/128GB variant of the Vivo V80 Lite was priced at Tk 59,999 in cash. After paying a 30 percent down payment, the outstanding amount stood at Tk 38,399. However, customers opting for the nine-month installment facility were required to pay an additional Tk 3,604, equivalent to around 9.4 percent of the outstanding amount.

Similarly, the 8/256GB variant was priced at Tk 69,999 in cash. Following a 30 percent down payment, the outstanding balance was Tk 44,799. Customers paying that amount through installments had to pay an additional Tk 3,800.

The figures raise questions about the nature of the additional charges. If the installment plan carries “0% interest,” customers want to know what the extra money is being charged for and on what basis the amount is calculated.

Vivo’s explanation

Vivo Bangladesh says “0% interest” refers to promotional plans where no additional interest is charged. The company maintains that any applicable service or processing fee does not constitute interest.

The company also says customers are informed before entering into an installment agreement about the down payment, applicable charges, monthly installments, tenure and total amount payable.

However, questions remain over whether customers are being given sufficiently clear information about the exact nature, rate and calculation of the additional charges when the total installment cost is significantly higher than the cash price.

Third-party financing raises further questions

In response to the issue, Vivo said it does not itself operate a hire-purchase or financing business. According to the company, third-party hire-purchase solution providers handle installment arrangements, financing terms and device-control mechanisms.

This has raised another question over transparency. Vivo’s promotional Facebook materials and a press release sent to the media on September 6 did not, according to the report, clearly identify the third-party financing provider or explain its role.

If the installment process is entirely managed by a third party, questions have been raised as to why the provider’s identity, applicable charges and total payable amount were not made more prominent in the “0% interest” promotion.

Nearly 10% service charge questioned

Another key issue is the justification for the additional Tk 3,604 and Tk 3,800 charges. If these amounts are service or processing fees rather than interest, consumers are questioning how the rates are determined and what services they receive in return.

Vivo also said it does not control devices when customers fail to make installment payments and that such measures are part of the third-party installment management system. The company says customers are informed of the arrangement and provide consent in advance.

However, the use of remote device-control or locking mechanisms on phones purchased by customers has raised concerns over the legal basis of such measures, the terms governing them and related data-privacy and security issues.

Tech expert Saif Ahmed said remotely controlling a customer’s device could raise serious concerns from the perspectives of digital privacy and information security. He said the conditions, legal basis and consent requirements governing such mechanisms should be clearly disclosed to customers.

Mohiuddin, president of the Bangladesh Mobile Phone Consumers Association, alleged that Vivo is collecting up to around 10 percent more from customers under its “0% installment” handset sales scheme, describing the practice as tantamount to deceiving consumers.

The controversy now centers on three issues: the “0% interest” claim, the additional charges of up to nearly 10 percent, and the lack of clarity over the precise nature and calculation of those charges.