Credit cards may not be offered instead of POS loans: regulator’s explanations
20 December 2021
News
The total cost of a loan raised to purchase a product at a point of sale shall be in line with the limitations set by the Bank of Russia. Misleading about the loan type to increase the interest rate is prohibited, the Bank of Russia notifies all banks.
The regulator has found out that some banks circumvent restrictions and, instead of POS loans, issue credit cards to consumers at considerably higher interest rates. Moreover, the credit limit on a card is the same as the price for the product, while the buyer does not receive the money as the entire amount is immediately transferred to the seller.
According to the Bank of Russia, such practices violate consumers’ rights and interests.
Preview photo: FTiare / Shutterstock / Fotodom