From 2013, a new law should come into force, which should reduce usurious loans and prevent various fraud. Many non-bank lenders and lenders often resort to various fraudulent or unfair frauds. It is these who want to focus the new law. What exactly should be changed?
Bills of exchange are canceled
One of the innovations should be the prohibition of bills of exchange for consumer loans. Today, it is common for non-banking companies to sign a blank bill of exchange. In the event that the client ceases to repay, the company immediately enforces the bill of exchange and thanks to it can very easily and quickly proceed to execution on the debtor’s assets. But promissory notes are also often misused for various frauds. This should be prevented by the new law; it will no longer be possible to use bills of exchange for ordinary loans and credits (consumer loans).
No calls to overpriced telephone lines
The law should limit another popular trick of fraudulent loans. It often happens that the company offers advantageous non-bank loans (no income, no register, no guarantor, etc.). However, in order to obtain such a loan, you must first call the toll-free telephone line (starting with number 9). Here the client spends quite a long time while the telephone operator discusses the terms of the loan. The result of the entire phone call is the disapproval of the loan and a really high phone bill. The use of paid telephone lines in connection with loans should now be banned.
Fee for loans only after approval
Another thing that the new law is to limit is the payment of loan fees. Many companies or “financial” advisors do not directly offer a loan, but merely mediate it. And they charge a fee for arranging the loan. The applicant for money must pay in advance. Often, such an intermediary only does this by passing the client’s request to a bank or non-banking company (such as Home Credit or Provident) for review. The application is then rejected, but the broker will not refund the paid fee even if you do not receive a loan.
According to the newly prepared law, this should no longer be possible. It will only be possible to request a loan mediation fee after the loan is approved or rejected. It will also be possible to withdraw from the loan agreement within 14 days.
High fines for usury loans
In addition, the new law will introduce supervision by the Cream Bank and the Czech Trade Inspection Authority over companies offering non-bank loans and other financial products. If the company violates any provision of the new law, it will face a fine of up to $20 million.