AFM and Nibud warn against payday loans
The AFM regulator has established that not all providers of short-term credit are yet complying with the new regulations and warns consumers to only do business with companies that have the correct license. "A number of providers of so-called flash credit may offer credit without a license and in some cases charge very high rates."
These providers have now been instructed by the AFM that they must comply with the rules and license requirements. "If this is not done Demorei, it can lead to sanctions," said the regulator.
Since June 1 of this year, the rules for consumer credit have changed. As a result, loans with a term of less than three months are now also subject to the rules. For example, no more than a statutory maximum in interest and costs may be charged (currently 16% per year). Companies that offer such credits must now also have a license to do so, unless the fee they charge is insignificant and therefore very low. Consumers can check whether a company has a license on the AFM website .
Nibud notes that some providers have adjusted their offer. They now ask for extra money for certain services, such as a guarantee, advice about insurance and a quick transfer of the money. In addition, they charge hefty fines. Nibud thinks this is a worrying development and explicitly points to alternatives to payday loans, such as overdrafts. "This is a cheaper option," said Nibud.
Flash credit and overdraft therefore also receive a maximum cost.
Short-term loans (less than 90 days) will soon be placed under financial supervision. This is necessary with regard to the European consumer credit directive. The bill contains guidelines for rules on advertising, a mandatory creditworthiness test and insight into the annual costs. The maximum credit reimbursement will also apply to these loans: no more interest and costs may be charged annually than 12% plus the statutory interest (currently a total of 15%). The measure applies to (among other things) loans with a term of less than three months, such as overdrafts at banks and flash loans.
Usurious interest in overdrafts.
The high interest rates that banks ask for overdrafts are a thorn in the side of State Secretary Frans Weekers of Finance. He said that during Question Time in the Lower House on Tuesday. The reason was a report from the Tros Radar program, which shows that banks charge up to 20 percent interest on overdrafts, without informing consumers of this. Weekers joined GroenLinks MP Bruno Braakhuis, who spoke shame of the `` usurious interest. '' Weekers and the House have previously decided to cap the interest rate to 15 percent and demand fairness and clarity from the banks about the costs. A bill on this matter is now in the Senate. The interest that the banks now demand is still formally permitted by law. Nevertheless, Weekers hopes that the banks will improve their lives in advance of new legislation. "The costs charged by the bank are not clear now and are much too high," Weekers said.