Media publications in recent days remind us that there is still no solution to a problem affecting many people who have fallen into the trap of “easy money,” becoming unable to service their loans or accumulating debts that put them at risk of losing their only home or being left with an income below the subsistence minimum.
This is a highly sensitive issue and the state cannot remain indifferent to such signals.
Therefore, the responsible institutions must act immediately! The Ministry of Finance, the Bulgarian National Bank, the Consumer Protection Commission and the State Agency for National Security must optimise procedures and strengthen oversight over non-bank lending institutions and submit proposals for the necessary legislative amendments to Parliament, which should be adopted at the very beginning of the autumn session.
The main objective is that regulations, oversight and sanctions must be changed in such a way that people are effectively protected.
In line with European requirements, it is necessary to move towards the licensing of the activity of the companies themselves, to introduce stricter control over interest rates and to adopt rules for each category of loans. In this way, unfair practices such as fake “business loans”, in which users lose their consumer protection, will be stopped.
Control over the fees and commissions for servicing and the cap on interest rates will allow for a healthy competitive environment while at the same time ensuring that consumers are protected from fraud.
The creation of a digital platform for the credit register at the BNB, on which all loans issued would be registered and announced in real time, will create a barrier to abuse, bad faith and fraudulent schemes.
The establishment of a compensation fund for victims of unfair practices by fast loan companies is an instrument that would enable an adequate response to every confirmed signal of abuse.