The Latvian Consumer Rights Protection Centre has imposed a fine of EUR 285,000 on non-bank lender 4Finance, which operates the brands smscredit.lv, ondo.lv and vivus.lv. The reason is that the company engaged in unfair commercial practices – inadequate assessment of the borrower’s solvency, the centre has told LETA.
The fine was based on the law on unfair commercial practices.
After analysing data about loans issued by 4finance, the Consumer Rights Protection Centre declared that the losses caused to consumers amounted to no less than EUR 3,367,307.
The centre argues that the company issued loans that would not have been issued if the company had known about the consumers’ existing liabilities.
It also explains that the lender must obtain information about the credit records of borrowers from all of Latvia’s credit bureaus. At this time there are two – Kreditinformācijas Birojs and Crefo Birojs.
4Finance, however, was only receiving data about consumer liabilities from Crefo Birojs, which was a violation of the law, the Consumer Rights Protection Centre declared.
Insufficient assessment of solvency can cause excessive liabilities for the lender’s customers beyond what would be acceptable for the income level. This, said the centre, makes it impossible for them to repay their loans.
As reported previously, the joint-stock 4finance company had revenues of EUR 35.438 million in Latvia in 2023, which was 34.% more than in 2022. Profits increased by 27.9% to EUR 15.433 million, according to Firmas.lv.
4finance was registered in 2008 and has share capital of EUR 24.549 million. Edgars Dupats is listed as the company’s beneficial owner.
Source: BNS
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