escalating concerns over manipulation in digital lending platforms - Increase in Criticisms Regarding Digital Loans
The Federal Association of Consumer Centers (vzbv), based in Berlin, has raised concerns about a proposed change in the law that could potentially increase cases of manipulation in online loans.
According to the vzbv president, Ramona Pop, the main issue is so-called imposed contracts - contracts concluded without the consumer's knowledge or explicit consent. The vzbv believes that the requirement for a written form for the conclusion of general consumer loan agreements is necessary to protect consumers from such manipulation and fraud.
The proposed change by the Federal Ministry of Justice would allow the text form to suffice instead of the written form for the conclusion of general consumer loan agreements and other financing assistance. This means a signature would no longer be required, a move seen as a contribution to reducing unnecessary bureaucratic hurdles.
However, the vzbv is worried that this change could potentially lead to more cases of imposed contracts in online loans. Multiple consumers have reported instances where employees of fraudulent trading platforms or supposed financial service providers tried to persuade them to perform a video identification procedure. In some cases, fraudsters took out loans in the victims' names or opened accounts over which they had no control.
In the first half of this year, there were 476 complaints about online loans, a significant increase from the 273 complaints in the same period last year. Among the problem cases where people sought advice from the consumer centers, there was an example of a consumer who was contacted by a supposed bank via a WhatsApp message and lost 1,300 euros.
If only a box needs to be ticked to take out a loan, fraudsters will have an easy time, according to Ramona Pop. The increase in complaints about online loans argues against the planned legal change as part of the implementation of the EU consumer protection directive into national law, according to the vzbv.
The vzbv's concerns about the proposed change in the law highlight the ongoing issue of consumer protection in the online lending market. The organisation advocates for keeping the signature as a requirement for concluding a credit agreement to ensure consumer protection and prevent fraud.
