90% of fast loan firms in Bulgaria violate the rights of customers

90% of the fast loan companies in Bulgaria violate the rights of customers and mislead them with their promotional messages.

What should customers look out for in contract clauses and what are the basic tips if we need to borrow funds urgently?

Before signing a quick loan contract, every aspect - positive or negative, such as delayed repayments - should be made clear to the customer, the Consumer Protection Commission reminds.

"Besides the clauses in the contract, the commercial messages they send to their customers are also important. I give you a quick example: providing a loan within 15 minutes. This is practically impossible to happen," Angel Dzhalev, a member of the Consumer Protection Commission, told BNT.

Tempting offers of easy access to much-needed money lead to the signing of contracts that may contain clauses that are unfair and others that are illegal, the consumer watchdog warned. Another strategy is overcharging interest for failure to meet a condition.

"A contract that has a condition that you engage another individual as your guarantor within three days. You naturally have no one you know to take that amount from and failure to meet that condition results in some big interest charges that increase the final cost of the loan you have to pay," said Angel Dzhalev, a member of the Consumer Protection Commission.

One solution is to compare different offers by asking for the European standardised information form, which was introduced by the Consumer Credit Act 2014.

"This is the document that must contain the full information, on the conditions and additional things that this institution imputes to customers, because although in the law in question, 2014 when it was changed, imposed on companies not to be able to exceed 50% annual percentage rate of charge - APR, there are unfair practices that are used," said credit consultant Yanko Tsenov.

Time is often a factor that pushes people to resort to quick loans, but a consumer loan from a bank can be used to repay it, experts advise.

"Even if a bank cannot respond immediately within the timeframe the customer needs to get the financing, once they take the quick loan, they should approach a bank and try to refinance or repay with a consumer loan. If everything was correct when the contract was signed, the customer would have to pay back one month's interest on that loan. No matter how high it is, it would not be a big expense," said Yanko Tsenov.

Consumer loans from banks are on more favorable terms, but it is possible that banks will refuse financing if you do not meet the requirements of the risk policy: for example, arrears or unofficial income.