On 28 April 2010, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of 1,000 euro on L'Easy A/S. This fine was imposed because L'Easy irresponsibly provided consumer loans during the period from 1 October 2008 to 17 November 2008.
In doing so, L'Easy acted in violation of Section 4:34 (2) of the Financial Supervision Act (Wet op het financieel toezicht -Wft). In the interest of consumers, the Wft requires providers of credit to obtain information on the financial position of a consumer prior to the creation of a credit agreement. The provider must also assess whether entering into the agreement is responsible. This is to prevent a consumer from borrowing too much. The provider must refrain from entering into the credit agreement if this is irresponsible in the context of preventing excessive borrowing.
The open standards above are elaborated in more detail by the market for consumer credit providers in the Codes of Conduct of the Dutch Home Shopping Organisation (Nederlandse Thuiswinkel Organisatie - NTO), VFN (the association of financing organisations in the Netherlands), and NVB (the Dutch Banking Association). The AFM considers the NTO standard as a reasonable basis for assessing whether the expenses of a consumer credit are responsible. The AFM has instructed market parties that they should assess the provision of a responsible consumer credit using the NTO standard. In the case of consumer credit, the AFM considers the NTO’s Code of Conduct as a minimum supplement to the open standards for prevention of excessive borrowing in accordance with the Wft. In calculating the available credit limits for a consumer, the NTO adopts the standard amounts used by the Nibud (Nationaal Instituut voor Budgetvoorlichting – Dutch national institution for budgeting information) to establish the model budget and minimum model budget.
L'Easy was a credit provider affiliated with the NTO and, with effect from 1 October 2008, should have performed an income and expenses check when assessing credit applications. The AFM’s review showed that, in seven of the cases examined, L'Easy granted consumers credit that was irresponsible in the context of excessive borrowing and in view of the financial position of the consumers. The seven case files were for loans granted after 1 October 2008, whereas, with a proper assessment according to the NTO Code of Conduct’s Income and Expenditure check, the loan applications should have been refused.
The AFM points out that L'Easy has no longer been operating as a credit provider in the Netherlands since the start of 2010. The administrative fine now published is a result of the same review on the basis of which the AFM imposed a fine on L'Easy for violation of Section 115 of the Decree on the Supervision of the Conduct of Financial Enterprises (Besluit Gedragstoezicht financiële ondernemingen - BGfo). This earlier fine was published by the AFM on 20 May 2010.
Now that objections or appeals against the decision are no longer possible, the penalty has become final. If you have any questions or complaints, you can contact the AFM's Financial Markets Information Line at: 0900 5400 540 (0.05 euro per minute - only in the Netherlands).
The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.
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