As an extension of its alert on the resurgence of irresponsible credit score, the UFC-Que Choisir appeared into the uncontrolled wave of mini-credit on the web (1). Given the opacity of tariffs, which conceals actual rates of interest as much as 100 occasions larger than the usury charge, the affiliation recordsdata three complaints for misleading business practices. While ready for the sector to be reorganized by European legislation, it calls on shoppers to be extraordinarily cautious earlier than subscribing to it.
Mini-credits, actual hazard
Mini-credits are instantaneous loans of small sums (as much as 1000 euros) on a brief-time period foundation (lower than three months). They are introduced by banks (Floa Bank, Cashper) or different monetary firms (Bling, Finfrog, Lydia) as “responsible” options to conventional credit score and the prices of banking incidents linked to overdraft.
These loans are touted as secure. They work like a payday advance. In normal, the reimbursement time period is taken when the borrower receives his earnings. However, if they're poorly distributed, they expose it, like some other credit score, to dangerous debt in addition to to delinquencies liable to additional weaken its finances.
“Push-to-crime” business strategies
The rules don't body mini-credit as full shopper credit, which supplies free rein. Companies within the sector current them as innocent, even useful. For instance, Floa Bank “make up” their “Helping Hand” like a scratch card (2) when Bling claims that credit score is “a good habit to take” so as to “maintain your financial health”.
Worse nonetheless, other than Cashper, none of those firms trouble to warn Internet customers in regards to the danger of non-reimbursement of a loan. Such a pitfall is all of the extra severe as they notably goal essentially the most precarious (mounted-time period contracts, younger folks, registered with the Banque de France (3), and many others.).
Bling, Cashper, Floa Bank: the new loan sharks
Contrary to the philanthropic guarantees of execs, the costs charged are as exorbitant as they're perverse. The desk under exhibits 5 loan gives for an quantity of 100 euros for a interval of 1 to 3 months.
After having utilized for credit score, the patron is confronted with a pernicious dilemma. If he waits fourteen days to acquire the fee, the advance is free (Bling and Cashper) or topic to restricted charges, though removed from being impartial in proportion to the quantity borrowed (Finfrog, Floa Bank, Lydia) . But if, like most prospects (4), he requests fast fee as a result of his want for liquidity is pressing, then the invoice typically flares up immediately (as much as 30 euros in prices).
Once all of those prices are taken into consideration, UFC-Que Choisir considers that Bling, Cashper and Floa Bank have been responsible of misleading business practices. Indeed, they disguise from debtors the annualized rate of interest of the loans they provide to acquire the advance throughout the introduced time restrict (together with necessary charges). Under these circumstances, if Finfrog flirts with the utmost licensed charge for shopper loans, Bling, Cashper and Floa Bank blithely exceed it (from 4 to greater than 100 occasions). In this regard, the palm of indecency goes to Cashper with a charge of 2234%!
Mobilized alongside shoppers through the financial disaster, particularly to stop the dangers they run because of the resurgence of irresponsible credit score, the UFC-Que Choisir recordsdata a grievance for misleading business practices in opposition to Bling, Cashper and Floa Bank to the Paris Public Prosecutor.
At the identical time, as a part of the overview of the patron credit score directive, the affiliation is asking European legislators to place an finish to the privileges granted to mini-credit by subjecting them to the rules that apply to traditional credit.
(1) Investigation in number 602 of the journal What to decide on May out there on newsstands since April 21, 2021.
(2) After clicking on the “Get started” button, when the patron is eligible for a credit score, he's greeted with “congratulations”. He can then click on on a button to “obtain [son] cash ”, web site moncoupdepouce.com of Floa Bank, consulted on 12/04/2021.
(3) For instance, “People with only low incomes will therefore be able to apply for a mini-credit and this is also the case for people registered with the Banque de France”, extract from the Cashper web site, consulted on 04/02/2021.
(4) For instance, 80% of consumers request the “Express Formula” in line with Bling.