Sverdlovsk Region: Central Bank Uncovers 90 Loan Sharks

21 February 2020 (09:07)

UrBC, Yekaterinburg, February 21, 2020. 413 entities operating without a banking license got detected within the Central Bank’s Ural division’s jurisdiction in 2019; the better part of these (over 80%) were lending money illegally, the division’s press service reports.

The number of uncovered loan sharks was at its highest in Perm Territory (104), Sverdlovsk Region (90), Chelyabinsk Region (86), and Bashkortostan (52). The Bank of Russia forwarded the case files to public prosecution authorities, the Internal Affairs Ministry, the Federal Tax Service, and the Federal Antimonopoly Service for further response action.

It turns out a number of organizations based in Sverdlovsk Region and Chelyabinsk Region offered private borrowers loans with automobile as security. In point of fact, the deal consisted in the organization buying the car out at a price below the vehicle’s actual market value and then leasing it to the factual owner. The cost of leasing was much higher than the buyout price. This was the way of hiding the interest involved in the deal. The primary trap for the borrower is that the very first overdue payment results in the automobile getting confiscated without any court procedure. Besides, in many cases the borrowing parties were not properly informed of all the terms and conditions and did not have the repayment schedule available, which meant they could miss the payment day no matter how solvent they were, the press service explains.

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