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Photo by Vladimir Ivanovo (V)
The Bank of Lithuania (LB) fined UAB mogo LT 90,000 euros because the company entered into a car lease agreement, although it mainly granted consumer loans, thus violating the Consumer Credit Law and avoiding the creditworthiness verification requirement of the client.
Added by the comment of mons.
LB inagrinjo 20182019 m. 72 contracts were signed for the management and use (lease) of mogo LT vehicles of the UAB, which established that they are fundamentally consumer credit contracts to which the requirements of the Regulation of Consumer Credit Betting and Credit Evaluation of the Consumer Credit Borrower and Responsible Loan.
Given the mitigating circumstances, the company took steps to remedy the situation and it would not be possible to commit the same or a similar violation in the future. The Financial Market Supervision Service of the Bank of Lithuania imposed a fine of 90,000 euros on UAB mogo LT.
The leases did not match
According to the terms of the company agreement, it was established that the consumer sold his car to UAB mogo LT, received money for it and continued to use the same car for taxes, and at the end of the contract he could buy the residual value.
In the case of a lease, the consumer rents the car for his own use without tying it to the sale of his own car. In this case, the company’s contracts were treated as consumer credit agreements, and the transfer and leasing of the property was intended to disguise the actual purpose of the transaction of providing a loan to the consumer without regard to their ability to repay the loan. credit, as established in the Consumer Credit Law.
According to LB, the other part of the vehicle lease contract concluded by UAB mogo LT, taking into account the actual objectives of the conclusion of the contract, was evaluated as car financing contracts, that is, consumer credit contracts, which are subject to consumer credit wagering requirements, regardless of no obligation to purchase a rental car.
mon: We have made a significant change
In its comment, mon mogo LT states that it respects LB’s decision and believes that it will improve the quality of the services provided and the products offered. mon says he will pay the fine.
We respect and appreciate the opinion of the Bank of Lithuania. However, it is important to note that we did not intend to break the law by creating products and processes in accordance with the requirements of the legislation that always applies in Lithuania. During the last months, we have been actively cooperating with the Bank of Lithuania, taking into account the comments and recommendations provided, proposing and making many necessary changes. We believe that all these changes will be good and clients will win in this situation, Laurynas Dzindzelta, director of mons mogo LT, is quoted in the comment.
According to the head of mons, mogo LT, which today has more than 9,000 customers, will continue to offer various legal requirements and products and solutions that meet customer needs, providing the opportunity to use the car in everyday life.
UAB mogo LT belongs to the international financial technology group Mogo Finance, established in 2012, based in Riga, Latvia and operating in the Baltic and other European countries, the Middle East, the Caucasus region, Central Asia and East Africa. The Financial Group always pays special attention to compliance and transparency of values that are highly valued by the Group’s international investment community.
mon mogo LT manages a diversified product portfolio, which now includes financial and non-financial products tailored to the different needs of clients. The long-term car rental product was designed and developed in consultation with the regulatory authority, i.e. the Bank of Lithuania.
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