A total of three proposals in the Czech Republic want to usury limit. As a result, but probably the situation may even deteriorate.
Similar stories can be in the Czech Republic, hundreds, thousands. Peter Novak is not the only one who has problems with the payment of its obligations, although not to be at least partly their own fault.
Just for the first quarter of the courts have adopted 465 proposals for publication of personal bankruptcy, which is twice more than the same period last year. Utilization are also a variety of counseling, increase the number of clients reported in virtually all the weekly Economist said. For example, Counseling Center in financial distress have had this year for the first four months of the year candidate for advice and assistance than the entire last year.
“Increasingly people are coming who have lost their jobs. But it is also quite enough of those to whom the employer paid wages, and this is fed into a secondary insolvency. Some have problems, even though the work still have, but they can not do overtime or to work only to 70 percent, and brings them into the situation of inability to meet their commitments, “confirmed Andrea Běhálková, President of the Council of the Association of SPES.
Lena Toms Prague civil counseling Remedium again says that as clients are increasingly also professionals. Have not even that Neplatiči and borrowers in trouble are just people from low-income groups. Very often they are rich people with higher incomes, but sudden change of situation, such as loss of bonuses at work, or simply a reduction in salary savings for the company, led to the inability to meet its obligations.
“The label that the debtor equal to the social event, often leads to the fact that people are ashamed for their problems is to consult and come late. Debts in the Czech society relate to most people,” says Ondřej Kotáb of the Association of Civil advice.
Debts heading to trillion
Czech households owed according to the central bank at the end of March with banks and other financial institutions more than 906 billion against the debt in February increased about ten billion crowns.
“The growth rate of new loans to households is negative for several months. According to our estimates of the economy despite the decline in the percentage of loans defaulted on bank loans to households remain in the annual run under four percent,” said Ekonom Central Bank Deputy Governor Miroslav Singer.
And although the Czech household debt – calculated each owed an average of 224 thousand crowns – keep growing, at least going to speed. In most cases, but it is not worth people, potential applicants for loans. The reason banks are more cautious, which tightened the conditions for mortgages and other types of loans.
Massage advertising
Yet at times it looks as if the Czechs did not have self-preservation and peace – nekrize crisis – the merrily borrow more. Greater caution banks in addition to loading the non-bank providers of loans, whose interest and charges most clients can drive to parádního trouble.
Companies that face more or less professionally, and in essence lend anything to anybody, it is possible to find countless Czech Internet. You can only choose: loans without proof of income, without insight into the registry, without a guarantor, express, negotiate through the web or by telephone, or even just the SMS. Contractual relations while starting willingness mainly under the slogan, but unfortunately often ends executor.
“There is more and more non-banking institutions which have no special offers, but the rent is already indebted people. Likewise, the number of companies that offer consolidation loans, but also have” unfavorable conditions, “notes Development Association worker civil advice Ondřej Kotáb.
The fact that borrowers in the debt spiral ends – thus taking one loan to repay another – is not unusual. One reached the combined advisory associations even confirmed that its debt and thus resolve the addresses of up to 90 percent of clients. “This solution attacks almost everyone. Not everyone will need to examine the contract terms – the APR, interest, penalty terms – and other things. Yet, it appears that, for example, with regard to the execution of social benefits such business by a paid service. This applies to State and taxpayers, “says Director of Counseling Center in financial distress David Šmejkal.
“I am personally convinced that it is okay to financial intermediaries to offer a loan product, which is their byznysový plan based on the fact that those loans will be repaid. This simply deceive the other hand, since such a loan product is, in essence, is” the way to slavery “debtor,” added the Deputy Governor of the CNB Singer.
However, advertising massage, for example, with “delicate lady, who can easily solve the problem, before leaving the mountains to find the parents that grew up the son of lyžáků”, or “help scatter-brained, which in the microwave cooking eggs and slept, buy a new oven, so no friend never, credit providers can ensure the supply of respectable customers.
Mysterious business
For example, in Profi Credit last year for credit in more than 38 thousand clients, they provide a total of almost two billion crowns. Cofidis turn lent to the end of last year, over 1.6 billion crowns, which is more than a quarter of the previous year. Provident Financial to its nearly 400 thousand customers lent six billion.
Last name of a certainly not wrong in the domestic market, even though it published the results under slightly decreased number of customers and the amount of loans. Revenues last year though it increased to more than four billion crowns.
More Provident but its results in the domestic market does not rozklíčovat shows only the summary for the entire multinational group divided up into regions.
Even tajemnější Money ACM is a company that, despite some urgency and promises that answers questions about the results, finally, the response did not address at all.
The loan for someone
Borrowing Money from ACM are very “interesting”. At first glance to be the APR (annual percentage rate) is not no way tragic. Online loan calculator calculates at 250 thousand crowns for the repayment over fifteen years installment of roughly four thousand crowns with APR of around 25 percent.
The loan, however, very often zvrhne to similar ends, such as the spouses Raškových, who described your story in the Czech Television and the pages of the Association of Defense consumers. Raška signed on loan, but promised 250 thousand of them, the company borrowed just 180 thousand crowns. The rest of you playing as fees. Although initially, the monthly installment of 4200, increased to twice the schedule of payments and the fifteen years to return the company 1.79 million.
Money ACM asks that the client properties liable for the loan, and how to match its clients in several internet discussions, many customers have been prepared on the roof over your head. Confirmed by the information system on the auction, where the ACM Money, in many cases, the appellant listed as the owner of the auction and a lien.
“The laws of the entitling us. We have to do business and have it entered in the Register of Trades,” argued in CT Jaroslav Hlavacek, Vice Chairman of ACM Money.
Significantly overpaying their loans the client can achieve even Provident Financial. In the model of credit of fifty thousand crowns to 55 weeks, the client pays 54 weeks installment crowns in 1600 and the last installment of four hundred. Thus the company will pay a total of 86 800 crowns.
“APR for this loan is 215.73 percent, point out that loan in the amount provided to those who are already with us and had a loan payable to the performance of the problems,” notes spokesman Provident Ondrej Holoubek.
The Home Credit would pay the client for such a loan after six years of over 76 thousand crowns, plus three and a half thousand in the account management fees, the borrower pays Profi Credit for the year just below 60 thousand crowns.
Market but also many other companies, or only “natural persons” which in business loans with very good earning. From the 199 percent APR offers on the internet loan to be smart loan. Often, of course, true that the smaller amount and shorter repayment period, the higher rate. For example, on your-pujcka.cz it is possible to obtain “credit” for three thousand crowns for the repayment of 27 weeks with over 460 percent APR.
Pre-fight, after the twelfth?
That is the power? Giant percent interest with a higher APR and the idea began some local politicians so much that they decided to fight against lichvářským practices.
The question of whether it’s “only” in the context of the election fight of seats within the party bosses, or part of the traditional political campaign for the European and early elections, leaving the weekly Economist unanswered. As well as to whether it is more than five minutes after twelve.
Lidovec Cyril Svoboda to reduce the interest rate sedminásobkem Lombard rate published central bank, which is currently 2.5 percent. This would mean that the loan may not be remunerated more than 17,5 percent a year.
The second direction is issued by the CSSD, the proposal assumes that the APR would be equal to repurchase rate (also from the Czech National Bank, now 1.75 percent) plus a tiered threshold percentage points, depending on the volume of loans. For example, in 9999 to loan money would be a maximum of 30 percentage points above the repo rate (ie 31.75 per cent). For test case 50 thousand loans, this would mean 20 per cent plus the repo rate.
The new government or with John Fischer, one of the proposals, disagree, arguing that has its own recipe. The new law on consumer credit is already in the consultation procedure and should apply in the first quarter of next year.
Firms in his will have to provide any information on the fees associated with the loan, will be precisely defined formula, under which the APR is calculated. In addition, the client will have the right to a copy of the draft of the credit to be able to walk with a professional, as well as the right to withdraw within fourteen days from the contract without giving reasons.
“We believe that the current regulation of the amount is sufficient. We prefer the achievement of the state where the consumer in negotiating the loan shall be informed in transparent conditions,” says Klara Hajkova, Deputy Minister of Finance, which together with the Ministry of Industry and Trade to prepare a new law involved .
Parliament but both of his proposals discussed (probably during an extraordinary meeting of the summer).
Transactions for the crime world
Their interests to defend the bank “lobby”. Czech Banking Association (CBA) is also fundamentally rejects that interest on debt reduction in the percentage limit, because it can flexibly according to reflect changing market conditions, the price of money.
“Also, the interest alone may not reflect the total fees for the loan, and even has its shortcomings APR. For example, penalty fees, which may be applicable to certain providers of extremely high in this indicator is not,” said CBA Executive Director Ekonom Jan Matousek.
A similar view is also central bank, although the regulation itself or other measures is not. Prepares opinions but both versions of the legislation.
“It is now clear that neither of the proposals will not address the problem of borrowers who get into debt trap that for various reasons revalued its ability to meet its obligations,” says Vice-Governor Singer. Trying to setting interest ceilings, the introduction of the maximum possible amount of the costs associated with the adoption of a certain type of loan or loans, according to him does not help.
“There will only work to ensure that similar transactions will be forced out into the criminal world with drastic implications particularly for borrowers. Work will be circumvented, for example, using the limits of the penalties for infringement of the credit agreement is written so that such a breach has occurred almost always,” refers to Singer. This fear of civil as well as counseling.
Figli moneylenders
About “kličkách” how to circumvent the law, it quietly spoken and lenders. “I do not believe that this absurd law passes. Set the maximum interest rate to between 20 and 30 per cent will lead only to the lenders, including banks’ ratings of their products other charges, and the market is zneprůhlední,” says Ondrej Holoubek of Provident .
“The idea of limiting the amount of interest we consider a significant interference with market principles. The price of money is evolving over time, in space, is given level of risk, duration of contract, type of financial product, target group and the like,” added Philip Soucek of Profi Credit.
It adds that a direct consequence of any regulation of prices of financial products may be significant restrictions on supply of these products. It looks as if the providers of these loans have agreed on their observations. The same reacted to the question economists and Cofidis spokesman Peter Kopfsteinová.
The two eventually agree is a manifestation of the deputy governor of Singer that the subsequent lack of financial services will lead to the need to satisfy the demand for funding within the informal economy, without any supervision of providers and without any protection of the client.
“The question also remains whether a legislative restriction at a time when law enforcement is, what is, is actually a real chance to change the current practice of non-bank entities,” notes Lena Toms of counseling Remedium.
An impossible condition
Maintain the condition of interest below the maximum limit of about twenty or thirty percent would fall short of meeting many of the lenders, often banks. “The problem would mean the most for loans with short maturities or classic credit card,” notes Matoušek of CBA.
“If we are talking about the border 30 percent APR, it would be a significant part of our standard of loans and advances,” admits Philip Soucek of Profi Credit. The subsequent impact on the company but does not want to talk.
Peter Kopfsteinová of Cofidis acknowledges that if the law limited to 30 percent APR, the company would have to reject requests for credit limit of thirty thousand crowns and below.
Civic activities and financial advice about adjustments usury practices welcome, especially because the current legislation in force, although the term usury cost, but in practice it as they can benefit too. He does, in particular showing distress, inexperience or weakness of reason, as it speaks about criminal law.
For example, Andrea Běhálková of counseling SPES does not feel that way reducing the interest or APR is correct. At the same time, but says that candidates for loans should be some way to protect. “It is necessary to promote financial education, increase financial literacy, to unify and simplify the contract,” he says.
The same goes with the Ministry and central bank and banking associations, which left the financial strategy of education and one of their main objectives is to prevent over-indebtedness.
“Like financial education from this September will become a mandatory part of teaching in secondary schools and others will follow, including the fundamental in several years,” says Deputy Finance Minister Klára Hajkova, but acknowledges that the specific impacts will be visible only in the longer term.
Regulating without fun
But will actually? The growth rate of debt is shifted according to the Ministry of Finance of the Czech Republic closer to the European average and in the future may mean the deepening of the problem. The campaign-style “Don ‘t you think you pay” in relation to this thoughtless lending resort but is not, but leaves the consumer or non-profit organizations.
Trying to education and prevention but not enough. Jan Matoušek of Banking Association claims that the situation would also help to regulate non-bank sector lenders who are not yet subject to virtually no control.
“Change should be the conditions of recovery. Companies should not wait with the recovery and have an increase in fees,” provides additional solutions to the tip Andrea Běhálková. Cancellation of this should be an arbitration clause, which puts borrowers in the wrong role and have many more problems than their own interest and credit over payments.
