Credit consolidation: watch out for bad practices.

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Lack of readability for the consumer

Unsolicited telephone and home canvassing, misleading advertising, and prohibited notices, the DGCCRF is sounding the alarm for the grouping of credits.

The Directorate General for Competition, Consumption and the Suppression of Fraud ( DGCCRF ) alerts consumers to bad practices on the credit pooling market and has just published the results of its survey conducted in 29 departments in October 2014 to June 2015.

A total of 182 establishments were checked on their business practices. The survey reveals an offense rate of 20.3%, “relatively high for the sector”, and points to a lack of legibility for individuals sometimes in a situation of financial fragility, even over-indebtedness. A fairly confidential sector marked by the withdrawal of traditional banking players, the presence of specialized establishments and a multitude of intermediaries (touts, business introducers, packagers, etc.)

Lack of readability for the consumer

Lack of readability for the consumer

The regulation is made complex because of the absence of specific sanctions in the event of infringements. However, “the shortcomings noted led to the drafting of 28 warnings, 7 injunctions and 2 minutes”, mainly in the segment of the purchase of consumer loans.

Failures that relate to “advertising, canvassing and the implementation of deceptive marketing practices”, details the DGCCRF. It is recommended to watch out for so-called “ illicit ” advertisements and overly attractive misleading statements. To date, the sector has registered few complaints, but difficulties remain in the face of door-to-door or telephone canvassing and the heavy intermediation which penalizes borrowers who are already vulnerable. The vigilance of the DGCCRF is maintained on these products and transparent information is still required.

The market is characterized by a large number of small intermediaries. Thus, “we advise individuals to contact an established professional, who has a storefront and an established activity. He will thus have greater negotiating power with his financial partners and will propose solutions adapted to his situation.

A solution to reduce your monthly payments

A solution to reduce your monthly payments

The generic term “ loan repurchase” covers both the grouping of consumer loans and mortgage loans. A double activity which is aimed at different audiences, both owners and tenants or accommodated. An advantageous operation which allows you to reduce your monthly payments in order to increase your living income or to invest in a new project. This activity is framed by law and the consumer can exercise his right of withdrawal.

Good to know :

Good to know :

  • The duration of the consumer credit consolidation is between 5 and 12 years and extends up to 35 years for a mortgage loan.
  • The withdrawal period is 10 days if the mortgage represents more than 60% of the amount purchased and 14 days when it represents less than 60%.
  • Early repayment indemnities may be applied with a 3% ceiling provided for by the Consumer Code.

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