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In the report, the company hopes that the sanction will allow it to improve the quality of the services provided and the products offered.
“We respect and appreciate the opinion expressed by the Bank of Lithuania. However, it is important to note that we did not intend to violate the law, we created all the requirements of the legal acts applicable in Lithuania when creating the product and processes. In recent months, we have been actively cooperating with the Bank of Lithuania, taking into account the comments and recommendations, proposing and making many significant changes, ”says Laurynas Dzindzelėta, Director of Mogo LT.
According to the head of the company, it will continue to offer its customers various products and solutions that meet the requirements of legal acts and customer needs, allowing you to use the car in everyday life.
The Bank of Lithuania (LB) announced on Thursday that Mogo LT had entered into car rental contracts to avoid customers’ creditworthiness verification requirements, although it mainly offered consumer loans.
He was fined for violating the Consumer Credit Act.
The Bank of Lithuania examined 72 Mogo LT vehicle management and use (lease) agreements concluded in 2018-2019 and determined that they are essentially consumer credit agreements, which are subject to the provisions of the Consumer Credit Law and the Evaluation of Credit Quality and Responsible Loan of Consumer Credit Beneficiaries. requirements.
Under the terms of some of the company’s contracts, it was established that the consumer sold his car to Mogo LT, received money for it and continued to use it, paying fees for the same car, and at the end of the contract he could exchange it for the residual value .
According to the Bank of Lithuania, in the case of rental, the consumer rents the car for his own needs without tying it to the sale of his own car. In this case, the company’s contracts were treated as collateralized consumer credit agreements, and the transfer and leasing of the property were intended to disguise the real purpose of the transaction, which was to provide a loan to the consumer, regardless of their ability to repay the credit.
The other part of the vehicle rental contracts entered into by Mogo LT, taking into account the actual objectives of the contract, are evaluated as car financing contracts: they are consumer credit contracts subject to the requirements of the Consumer Credit Law , regardless of whether the contracts formally specify the rights of the consumer. instead of the obligation to buy a rental car.
The imposition of the fine took into account extenuating circumstances: the company took measures to remedy the situation and prevent the same or similar type of violation from occurring in the future.
Mogo LT belongs to the international fintech group Mogo Finance, established in 2012, which is headquartered in Riga and operates in the Baltic and other European countries, the Middle East, the Caucasus region, Central Asia and East Africa.
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