If all additional products and services are included in the full cost of the loan (CCC), borrowers will understand literally to the ruble the size of their debt burden, will be able to more adequately calculate their ability to secure obligations, and the level of delinquency will begin to decline again. This was announced to Izvestia by the head of the All-Russian Popular Front (ONF) project “For the Rights of Borrowers” Yevgeny Lazareva, commenting on the corresponding initiative of the Bank of Russia, on Thursday, October 14.
Earlier on the same day, Izvestia was informed by the Central Bank that a lender offering the borrower additional services to the agreement will be obliged to provide an alternative loan option without these services, calculating its full cost and informing about its size. The regulator proposed to introduce such an innovation into the legislation on new rules for calculating the CPM.
The Central Bank and the Ministry of Finance are working on a relevant bill, which is planned to be submitted to the State Duma in the autumn session. The upcoming amendments will affect not only the principles of calculating the CPM, but also the “cooling period”, advertising of credit products.
According to Lazareva, the most common non-alternative imposed product in the execution of credit agreements is insurance. Moreover, creditors sometimes impose insurance, which, even if desired, cannot be justified by the need to secure debt obligations, she complained. For example, when registering a simple consumer loan, some lenders practice the inclusion of voluntary medical insurance in insurance risks. Or, when applying for a cash loan, it is “strongly recommended” to insure the life and health of family members.
Next in this ranking in terms of the number of complaints is “the so-called legal support”. The head of the project “For the rights of borrowers” noted that no one was able to “clearly explain” what it is and why the borrower needs it, but most consumers who paid for this support did not face its need and as a result received “just information services”.
In third place in terms of the number of complaints are various information services and notifications. Lazareva emphasized that in this way, lenders “shift” part of their operating and marketing costs to consumers. Also, some lenders “practiced preliminary affixing of marks about the client’s consent to connect various services and were silent about the opportunity to refuse them,” she added. At the same time, the refusal would not entail an increase in the interest rate and other deterioration of the terms of the contract.
Such practices, according to the specialist, became the reason for the introduction of a bill to the State Duma this summer on amendments to the law “On consumer credit (loan)”, according to which creditors are prohibited from putting any marks in contracts in advance.
“Undoubtedly, the market will resist the inclusion of all additional products and services in the CPM. This will deprive them of a significant share of the profit. But in the long term, this measure will be beneficial: the consumer lending portfolio will become healthier, and clients will become more loyal, ”she concluded.