CPC Finds Unfair Practices in the Offering of Fast Loans; Fines of Up to €25,000 to Be Imposed

The Consumer Protection Commission (CPC) has identified unfair commercial practices among several companies operating in the non-bank consumer lending sector, for which administrative penalties of up to €25,000 will be imposed, the Commission announced.

The investigation found that consumers had been provided with information that failed to give a clear and accurate picture of the true cost of credit. In particular, the annual percentage rate (APR) presented did not reflect the full range of costs associated with the loan.

According to the CPC, this could lead consumers to believe that a loan is cheaper than it actually is.

In some of the contracts reviewed, the advertised annual percentage rate (APR) related to a more favourable version of the credit product, while the terms that were actually applicable resulted in a significantly higher total repayment amount. As a result, consumers were not given sufficiently clear information about the real cost of borrowing and the financial consequences of entering into the agreement.

The Commission noted that this is especially important in the case of fast loans, as the APR is the principal indicator consumers use to compare different offers and determine which option is more advantageous. When the APR does not include all known and foreseeable costs, consumers are unable to make an informed decision.

Inspectors also identified cases in which consumers were provided with information that could create a misleading impression of the financial consequences of late repayment. Some pre-contractual documents and fee schedules included references to additional charges for debt collection, reminder letters and other actions by the lender.

Such information may lead consumers to believe that they are liable for fees beyond those permitted by law, creating additional pressure to make payments and potentially influencing their decisions. The Commission stressed that these practices directly affect consumers’ economic interests, as the absence of clear and accurate information about the true cost of credit restricts their ability to make informed choices.

The CPC added that meetings will be held with the affected parties with the aim of establishing fair, transparent and balanced conditions between companies in the non-bank consumer lending sector and the consumers who use their services.