Bulgaria’s prosecutor’s office said on October 16 that it would begin an investigation into quick loans and the regulatory oversight exercised by the Bulgarian National Bank (BNB) and the Commission for Consumer Protection (CPC).
The investigation will be carried out by the Supreme Administrative Prosecutor’s Office and comes as a result of a journalistic investigation by Nova Televisia channel, broadcast on October 11. The report alleged that some of the lenders engaged in unfair practices, including failure to clearly and accurately disclose terms and conditions or fees owed by the loan recipients.
Quick loans in Bulgaria are different from payday loans that have become popular in Western Europe – the amounts borrowed are higher (up to and exceeding 1000 leva, or about 500 euro) and they have a longer repayment time, although this is usually one year.
The prosecution statement said that the subject of investigation will be the legality of the practices portrayed in the Nova Televisia report, as well as whether the BNB and CPC have put in place the necessary legal mechanisms to protect consumers from predatory lending.
In the wake of the report, possible solutions to curb abuses have been raised in recent days, but a bill is yet to be tabled in Parliament.