Warning sanctions have been imposed on the domestic non-bank loan market in recent weeks. The Czech National Bank massively punished a tandem of well-known players on the credit market. With fines in the aggregate amount of eleven million crowns, the regulator “appreciated” carelessness in providing loans, as well as indifference in checking the financial condition of borrowers. Some of the loan agreements were not even signed. Although penalties were imposed for business missteps by lenders primarily during the pandemic, experts believe that the non-bank loan market has only made a partial step forward in the Czech Republic since then, and borrowers are potentially at risk of quickly falling into debt traps.
“The company did not ensure that the consumer credit agreements were signed in writing by itself and the loan applicants in such a way as to ensure sufficient legal certainty about who and when the legal act was performed, thereby failing to ensure a written form of the consumer credit agreement,” alludes to elementary deficiencies in the loan business of the company Zaplo in the period shortly before the first wave of the pandemic, the April decision of the CNB.
The nearly hundred-page document is signed by members of the Banking Council Eva Zamrazilová and Karina Kubelková. Zaplo, owned by a Latvian company, received a seven million fine from the regulator despite its appeal. Among other things, the decision mentions that the company offered to extend the maturity of the loan or postpone the monthly payment for additional fees, which significantly increased the cost of the loan for the borrower.
Business with incredible interest
The domestic creditor Profi Credit also earned a fine of four million primarily for indifference to the financial profile of the loan applicant. “Both companies are problematic from our point of view.
Tags: Zaplo Profi Credit pillory CNB handed exemplary punishments creditors pay millions
