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Consumer Rights Protection Centre applies 15,000 euro fine on SIA Creamfinance Latvia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUConsumer Rights Protection Centre (CRPC) has made a decision in a consumers’ collective interest violation case. The centre has decided to apply a legal obligation on SIA Creamfinance Latvia to cease dishonest commercial practices and pay a fine of EUR 15,000.

SIA Creamfinance Latvia represents two fast loan companies – Crediton.lv and Ladyloan.lv.

CRPC has concluded that SIA Creamfinance Latvia has included unfair contractual obligations in signed loan contracts.

The centre notes that SIA Creamfinance Latvia cancelled its previously provided 100% discount (0% interest rate) on missed and partial loan repayments. Instead the company calculated interest for the entire period. The interest-free period was also applied with an annual interest rate that would have been applied if the loan was not given a discount.

Secondly, the interest rate for late repayments does not fin regulations in one specific case was 0.39% a day. By applying a discount and offering a reduced interest rate, the loan contract was applied also with a specific interest rate. This rate was used as the base for the calculation of maximum interest amount. In certain cases the company had the right to calculate interest rate on missed payments at 0.1% for every missed day, because the interest rate in the initial period of 0%. CRPC concluded in the end that the point detained in the contract regarding interest rate for missed payments is to be considered unfair and void the moment a loan contract is signed.

When reviewing the case, CRPS concluded that SIA Creamfinance Latvia performed commercial practices non-compliant with professional ethics, which could potentially negatively impact economic state of middle-class consumers.

CRPC explains that loan contracts mentioned that a 100% commission discount was provided to the consumer. Moreover, the contract also mentioned that the discount would by null and void if the customer fails to perform repayments on time. However, even if the consumer has read through the contract’s text and has accepted it this does not guarantee honesty and compliance with the same requirements from the service provider. On top of that, middle-class consumers depend on the service provider and trust them to act in accordance with the law.

CRPC concluded that the violation committed y SIA Creamfinance Latvia should be considered as serious. Because of that, the company has been applied with a fine of EUR 15,000. The company is also obligated to cease its unfair commercial practice.


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