Choose your loan carefully: watch out for intermediaries!



Press Release: As in the case of consumer credit itself, people should be careful when choosing who will advise them on its acquisition. Indeed, so-called consumer credit intermediaries can be as dangerous to consumers as moneylenders themselves, and poor choices can be very expensive. This is confirmed by a survey among banks and branded non-banking companies. Therefore, the Safe Loan Navigator warns – beware when using intermediary services.

Percieved in the consumer credit market

Percieved in the consumer credit market

More and more people perceive that in the consumer credit market, in addition to solid banking and branded non-banking companies, there is a gray zone with problems. To avoid the problems of execution and repayment, many people try to contact credit intermediaries.

They believe that these companies will provide them with optimal conditions. The Safe Loan Navigator warns that many of these businesses are parasitic and dangerous to consumers. “Many people do not realize that they pay money for what is absolutely necessary.

There is no need for a solid company, ”says Mr. Max, spokesperson for the Safe Credit Navigator project. Moreover, dangerous intermediaries usually do not guarantee anything at all – neither granting a loan nor refunding a fee, which is usually paid in advance.

People pay a fee, but they do not receive credit

People pay a fee, but they do not receive credit

So it often happens that people pay a fee and then the company formally applies for a loan, even if they know in advance that the client will not meet the requirements and will not receive the loan. However, the company will not return the money because it has done its job, submitting the application. An even worse option is that a non-solid broker turns to a dangerous lender.

That is what Mrs. Rima from Liberec paid for. It used the services of an intermediary in a situation where it quickly needed cash to deal with a difficult life situation. “Because I didn’t understand the loans and was afraid to borrow myself, I found an ad for one of the intermediaries that offered help with the loan.

I was glad that someone who understood this would take care of it. But the loan they got from me was from some usurer who was having trouble repaying because he kept changing bills and various symbols, and even when I paid, he kept reminding me that I was not paid.

I finally faced executors. When I went to complain to the intermediary companies, I learned that they were not affected and that this was my problem to deal with the company that provided me with the loan. They were not interested in the fact that they had done it to me, they had recommended the company and provided all contractual documentation, ”Rima describes her story. She also paid three and a half thousand for this service.

The survey among lenders pointed to the problem: mediation costs even a tenth of the price of the loan

The survey among lenders pointed to the problem: mediation costs even a tenth of the price of the loan

The Safe Credit Navigator conducted a survey of 50 consumer credit companies on credit intermediaries. Indeed, parasitic intermediary companies are one of the current threats to consumers who pay considerable money for their services, without the services being provided being always of good quality and the loans offered always safe.

As the field survey showed, the situation in this area is not improving. Credit intermediation does not have to be a cheap matter – in problematic cases, consumers most often pay for credit intermediation of up to USD 5,000.

Given the typical amount of the loan, which is up to 50 thousand crowns, it is up to 10% of the loan amount. As a result, its total price may increase significantly. Moreover, as mentioned above, these dangerous companies do not guarantee anything and ignore claims.

We have also noticed situations in the market where a credit intermediary is also a credit provider. People will thus unnecessarily pay twice for such a company. The issue of consumer credit intermediaries is regulated by the new version of the Consumer Credit Act, but this has not prevented unfairness.

“Our experience shows that so-called mediation is very often abused by usurers, who thus create a so-called good name. The consumer then succumbs to the feeling that the loan provider has helped him choose a professional and is thus losing the necessary alertness, from the Financial Crisis Advisory Center.

For example, Mrs. Jitka from Usti nad Orlici borrowed 20 ths. USD from a non-serious company for high interest and APR (annual percentage rate of charge). Mrs. Boom then went to Prague where she handed over the money to the intermediary as a deposit or down payment. She was to receive credit offers, with one being pre-negotiated. She didn’t get anything, and neither the company nor the broker took the phones, and the ground went down.

How to choose a credit intermediary?

How to choose a credit intermediary?

If the consumer chooses to use the services of an intermediary, he should always keep in mind the basic rules with regard to the security of the credit granted and also the amount of the fee. “There is certainly a need to focus on the contractual obligation between the intermediary and the consumer.

It should clearly specify not only the price and that it is payable only when the consumer actually receives the credit, but it should also clearly state the terms and responsibilities of the intermediary company.

Intermediaries and law

Intermediaries and law

From the perspective of the law, it is necessary to draw attention to two basic provisions that should help consumers against fraudulent or low-quality intermediaries.

‘If the consumer is to pay remuneration for a consumer credit intermediary for his services, the intermediary shall not require payment of the remuneration before informing the consumer in paper form or on another durable medium of the outcome of the intermediary activity, in particular of the creditors “Is stated in the Act on Consumer Credit – No. 145/2010 Coll.

This means that the intermediary must show the results of his work to the borrower and only after the consumer has assessed the offers and sees that the credit has actually been offered, does the intermediary have the right to payment.

If an intermediary breaks this rule, he is exposed to a relatively large fine and, above all, the consumer has the right to protection. Similarly important is the provision allowing withdrawal: The contract in which the negotiation of consumer credit is arranged must be concluded in writing between the intermediary and the consumer and must contain information on the consumer’s right of withdrawal pursuant to § 17b.

The consumer may withdraw from the contract providing for consumer credit without giving reasons and without any sanction within 14 days from the date of conclusion of the contract, unless the contract on which the consumer credit is concluded has been concluded. This right shall apply to the consumer in its entirety and without any penalty under the mediation contract.

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