2024-01-08 01:26:48
He Ombudsman, Ángel Gabilondohas started a ex officio performance to ask the Bank of Spain and to the Secretary of State for Economy and Business Support on the degree of protection that consumers – among whom are especially the self-employed – have in the face of so-called microcredits or quick loans. This action has occurred after receiving complaints from citizens about the high interests they pay to these companies that, in many cases, are not considered credit institutions.
This is an issue that affects many self-employed people who are sometimes forced to request one of these quick loans toFor example, paying an invoice to a supplier when a client is late in the respective payment issued by the business, for the repair of their professional vehicle or to acquire materials. In these cases, they may be overwhelmed by the high interests and demanding repayment terms of these loans, which could even exceed the limits of legality.
The Ombudsman has asked the Bank of Spain, which is the supervisor of the banking system, and the Secretary of State for Economy and Business Support the following: “yes, based on the powers granted to them by Law 10/2014 of June 26, are carrying out some type of action on the entities that grant these products, and whether any guidelines applicable to microcredits have been issued”.
In the opinion of the Ombudsman, regardless of the self-regulation that companies that offer these products may practice and the numerous judicial rulings that have ruled in favor of consumers, it does not seem that there is a specific regulation that disciplines their actions, beyond of the consumer and user protection regulations, or those provided for in the Civil Code and the Commercial Code.
Facua asks for more protection for self-employed people who request a quick loan to cover certain expenses
By Facua-Consumers in Actionas pointed out by his general secretary, Rubén Sánchezto this newspaper, “it is necessary for consumer authorities to apply strong sanctions to financial companies that sell credits with lack of transparency about conditions, deadlines, interests, etc. And that regulation be improved to put caps on interest rates, defining them as ‘usurers’ certain types above the market average,” he explained.
On this specific point, Facua believes that usury must be defined as an abusive practice contrary to the law, in defense of consumers, so that this can be punishable, because now you can go to court to confront it, but, since it is not a consumer violation, it cannot be fined; It can only be fined if it is determined that there was a lack of transparency, explained Rubén Sánchez.
From this organization they advocate for an improvement in regulation that could put a cap on interest rates, but they want to show “their absolute distrust in self-regulation”. They believe that it is necessary to improve legal regulation and control of administrations.
These are the “dangers” of quick loans, according to experts
Currently, the High Commissioner of the Cortes Generales estimates that “microcredits tend to be directed towards a type of consumer who is going through difficult, even desperate, economic situations, and who choose to relegate their right to information and financial advice, in addition to lacking of all negotiating capacity.” Added to this is that these loans – whose amounts are usually between 1,000 and 10,000 euros – are granted almost automatically, “even online or by telephone, without a risk or solvency analysis, which leads many people to a situation of over-indebtedness,” they explained.
From the Organization of Consumers and Users of Catalonia They assessed the status of the matter and “the dangers that this type of financing hides.” In recent years, it is common to find companies that offer microcredits in 15 minutes, advertising with a first loan that can be contracted without interest, but behind this ease and simplicity there is a lot of small print and this has caused many people, who have contracted this type of credit, they find themselves involved in debt, they indicate.
And they argue it in five points:
High interest and costly extensions, proving complicated to pay, because the interests and commissions are usually very high compared to the initial loan. Added to this would also be the high interest due to a possible delay in payment.
Short return period, in which the lending entity demands payment of the money borrowed, plus interest, within a maximum period of 30 days. And the user may find himself trapped by the impossibility of obtaining enough money to be able to pay the debt, leading him, in some cases, to extend the payment in exchange for paying a penalty. And the payment of this possible extension does not settle the money requested for the credit or the interest.
Usury: The high interest rates on microcredits can turn them into usurers, according to the current jurisprudence of the Supreme Court.
Outside of financial regulationssince these quick loans do not need any supervision or control by the Bank of Spain.
Disinformation, since they are granted, practically, without a study and the majority of those affected, on many occasions, resort to them as a last option. When contracting services, there are cases in which they are not informed of the consequences of non-payment or the penalty when requesting an extension.
Given this, what advise from this Organization is to “take certain precautions when requesting a loan, read the fine print carefully, the non-payment conditions and the non-payment commissions.”
Under what regulations are the microcredits requested by some self-employed people governed?
The information provided from the Spanish Microloan Association (AEMIP)refering to applicable legislation to this activity, is that “the granting of low-amount credits does not have a specific regulatory framework, which in no case means that the companies that operate in this sector are not regulated by the current consumer credit regulations and all the legislation on consumer matters, data protection, money laundering, etc.”
Thus, the general framework of a loan contract is defined by the article 1,740 of the Civil Codeunderstood as that contract in which: (…) one of the parties delivers to the other, or something non-fungible, so that they can use it for a certain time and return it, in which case it is called bailment, or money or another fungible thing, with the condition of returning the same amount. of the same species and quality, in which case it simply retains the loan name.
Currently, Law 16/2011, of June 24, on Consumer Credit Contracts obliges lenders to help consumers choose the credit contract that best meets their needs and financial situation. Along with this, it establishes a series of guarantees for the consumer, so that lenders comply with certain obligations related to advertising, pre-contractual and contractual information. In addition, it includes a series of consumer rights that cannot be waived.
In this way, the information provided to the person requesting the loan dIt must contain a series of minimums and comply with what is established in the standard. Specifically, it regulates in detail the basic information that must appear in advertising, in commercial communications and in offer announcements that are displayed in commercial premises, in which credit or intermediation for the celebration of transactions is offered. a credit contract, as explained by this Association.
That is, it obliges lenders and, where appropriate, intermediaries, to help the consumer in the decision on choosing the credit contract that best responds to their needs and financial situation, and all this by explaining the pre-contractual information, the essential characteristics of the proposed products and the specific effects they may have on the consumer’s decision, including the consequences in the event of non-payment by the consumer, as set out by AEMIP.
And they add that everything previously mentioned would be in accordance with the provisions of Royal Legislative Decree 1/2007, of November 16, which approves the consolidated text of the General Law for the Defense of Consumers and Users and other complementary laws, which have the purpose of guaranteeing maximum transparency in consumer credit operations, “in such a way that the consumer cannot be surprised by obligations that they did not have the opportunity to know about before arranging the loan,” they explain.
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