Translated using ChatGPT service.
On Tuesday, September 23, the government approved amendments prepared by the Ministry of Economics (MoE) to several laws aimed at strengthening consumer protection in the financial sector, including reducing the risk of fraud. The changes will also limit the possibility of consumers falling into excessive debt by extending regulation to cover deferred payments.
These amendments to the Consumer Rights Protection Law, the Law on Taxes and Duties, and the Credit Information Bureaus Law will ensure the transposition of the European Parliament and Council Directive of 18 October 2023 on consumer credit agreements into national legislation.
The amendments stipulate that deferred payments—where a seller or service provider allows a consumer to pay for a product or service over time without interest or additional fees—will henceforth be considered credit agreements. Such purchases often involve large amounts and long repayment periods, meaning they should also be subject to consumer credit regulation, including the assessment of a consumer’s ability to repay.
Large companies (with more than 250 employees and an annual turnover exceeding EUR 50 million) that provide deferred payment services will be required to register with the Consumer Rights Protection Centre (CRPC). Registration will also be required for intermediaries offering consumer credit brokerage services who have not previously been registered as mortgage credit intermediaries.
The amendments to the Consumer Rights Protection Law expand the obligations of lenders to provide information to consumers. By offering clearer general information about available products, the changes will help consumers better understand the nature of financial services, compare options, and make informed decisions that fit their individual needs.
Before initiating debt collection or recovery proceedings, lenders will be required to apply tolerance measures, which may include extending the credit term, changing the loan type, deferring payments, reducing the interest rate, offering payment holidays, restructuring payments, partial debt forgiveness, or debt consolidation.
Consumers facing difficulties in meeting their financial obligations will be entitled to specialized debt management assistance. Debt counselling services will be provided on behalf of the state by an institution designated by the Cabinet of Ministers.
The draft laws also include several Ministry of Economics initiatives to further strengthen consumer protection. For example, the amendments to the Credit Information Bureaus Law introduce the right for consumers to mark in credit bureau databases that they do not wish to receive credit. Lenders will be obliged to respect this indication. This measure will help prevent impulsive borrowing and protect consumers from fraud where personal data might be used to obtain loans without consent.
Under the amended Consumer Rights Protection Law, lenders will only be allowed to charge consumers reasonable and objectively justified actual costs for payment delays or debt recovery. This will prevent the imposition of disproportionate fees on consumers already facing financial hardship, such as excessive charges for reminder notices or letters.
Consumers will also gain the right to access comprehensive information about all their credit obligations and repayment status through any credit information bureau. While lenders already receive such data for creditworthiness assessments, the amendments will ensure that consumers themselves can access this information in an aggregated form to evaluate their own financial standing. This will also facilitate debt counselling processes. These changes will be implemented through amendments to the Credit Information Bureaus Law and the Law on Taxes and Duties.
For the government-approved amendments to enter into force, they must still be adopted by the Saeima (Parliament).