How Banks And Mfis Impose Unnecessary Services On Online Loans.Often, along with a loan or a loan, people receive various additional services: insurance, subscriptions, SMS informing, legal advice and other paid services. The overpayment for such services is often significant, and the service itself is useless for the borrower.
How Banks And Mfis Impose Unnecessary Services On Online Loans
Some lenders go to any lengths so that the client does not understand that the service can be refused. Often they do not even break the law, but simply arrange an attentiveness test or play on trust. We will analyze the most common ways of imposing additional services when concluding a loan agreement online.
Already checked boxes
By law, banks and MFIs, when applying for a loan, do not have the right to put marks in advance that indicate the borrower’s consent to additional services. But on the websites of some lenders, you will see such checkboxes, and if you try to remove them, a “technical failure” will occur. You simply will not be allowed to proceed to the next step and submit a loan application.
It is better not to deal with such violators at all and choose another bank or MFI.
It happens that automatic ticks do not appear at the moment when you just take out a loan, but later. For example, you want to extend a loan or pay off part of the debt ahead of schedule – and for this you need to send a separate online application to the bank or MFI. It may also list additional services and mark that you agree with them.
If you see that the lender has decided everything for you and does not give you the right to refuse, take a screenshot and send it along with a complaint to the Bank of Russia through the Internet reception .
One tick – multiple services
Together with the loan, the bank or MFI offers insurance, which should reduce the interest rate . A person agrees to purchase it – puts a tick about his consent in the column with the abstract name “insurance services”. And he does not even realize that he is buying not one policy, but several.
At the same time, only one insurance affects the interest on the loan – the one that is relatively inexpensive. The rest, perhaps completely unnecessary, simply increase costs – sometimes by tens of thousands of rubles.
There is only one way out – to check what exactly is hidden behind the checkmarks and fuzzy wording. Read all terms and conditions carefully, including those in small print or under asterisks.
The description of the service is hidden under an inconspicuous link
At one stage of the loan application, the borrower sees a cryptic phrase, such as “agree with the following” or “financial protection”, next to which you need to put a tick. At the same time, it is completely impossible to understand that this checkbox is somehow connected with the purchase of additional services. Usually a person thinks that he is simply agreeing to the terms of a loan or loan. And when he chooses financial protection – that the rate or other parameters of the contract will definitely not change.
The consent phrase looks like regular text, but is actually a hyperlink. If you click on it, you will be taken to a page with more or less clear information about what you agreed to. For example, for an SMS-informing service or insurance against job loss. But, perhaps, you are on maternity leave or retired, they can’t fire you anyway, and you don’t want to receive mailings from a bank or an MFI.
You need to understand that each checkmark can be a confirmation of the purchase of unnecessary services. Do not put down any marks until you figure out what they mean.
Refusal of additional services is disguised as a refusal of a loan
When filling out an online application for a loan, you need to select one of the options – “sign an agreement” or “refuse the application”. An illusion is created that we are talking about a loan agreement or an application for a loan. But no! So unscrupulous creditors hide the button for refusing additional services.
If you click on “sign an agreement” – you agree to some service, if you click on “refuse the application” – you simply go to the next step in applying for a loan.
Such an online application may not mention the service that you are included in the contract at all. And information about the service is hidden in additional agreements or “special offers” on the website of the bank or MFI.
To understand what exactly the lender means when he asks you to click on the button, you need to spend a lot of time. Before signing the contract, be sure to check whether it accurately indicates the exact amount that you borrow.
But often people find out that they agreed to buy some kind of service only when the bank or MFI, after transferring the loan, immediately writes off part of the amount back to pay for additional services. In this case, you can cancel the extra options even after purchasing them and get your money back (how to do this, read the section “ I agreed to an unnecessary service. How can I refuse it?” ).
They assure that a loan without additional services can only be issued at the office
Sometimes banks include an additional paid option in the loan agreement and do not allow you to refuse it when a person applies for a loan through a website or mobile application. This can only be done in person – at a bank branch.
Such a condition is included in the contract with the expectation that the borrower does not want to waste time and still pay for an unnecessary service. Often these are inexpensive services, the cost of which seems to a person not so critical, and he agrees to sign the contract as soon as possible.
If you do not want to be led by an unscrupulous lender, you can either really go to a bank branch or look for another offer.
You need to check the box to cancel the service
Most often, you have to put marks in documents in order to agree to something. But in this case, the story is reversed – a checkmark is needed to cancel the additional condition.
Insurance or other service is already included in the contract by default. And the opt-out box is often not highlighted graphically in any way – this option is easy to miss.
In order not to pay for an unnecessary service, it is important to carefully read the text without skipping literally a single line.
They promise a discount that isn’t there.
MFIs can mislead the borrower with “special prices” for an additional service. For example, next to the description of the service, two numbers are indicated and the largest of them is crossed out. A person perceives this as a discount on the service and expects a lower price that is not crossed out.
But when checking the final cost of the contract, it turns out that there are no discounts and the full cost of the service is included in the calculation, and the strikethrough is just a marketing technique. Who and under what circumstances can receive this special price is not written anywhere.
The only way not to fall into the illusion is to calculate in advance how much a loan will cost you without additional services, and not enter into a contract until you see the correct amount.
How to avoid overpayment?
Many of these tricks can be waiting for you not only online, but also at the lender’s office. Therefore, the general advice is to always carefully and slowly study all the documents that you need to sign. By law , this is given 5 working days. During this period, the lender cannot change the terms of the loan or credit that have already been offered to you. If you sign a contract automatically, there are high chances of missing important points and overpaying for unnecessary services.
- Pay attention to the size of the loan – is this the exact amount you requested.
- Study the table with individual conditions on the first pages of the agreement – it indicates whether the interest rate will change when you refuse additional services and how.
- Check the total cost of the loan (TCC) in the square box in the upper right corner on the first page of the contract. It shows the amount of the overpayment and takes into account not only the interest on the loan, but also the cost of additional services.
It happens that a bank or an MFI does not indicate additional services in a loan agreement, but sells them separately. But you give consent to their purchase when you fill out an online application for a loan or credit – just by checking the box. The cost of such services may not be reflected in the CPS. At the same time, part of the loan money will immediately be written off as payment for them. Therefore, you need to carefully study each line of the loan application.
Please note: when the cost of an additional service is included in the amount of a loan or loan, interest will also be charged on it. Estimate how much you will overpay for it. It may be more profitable to pay for the desired service separately.
When a bank or an MFI does not allow you to choose the method of payment for a service (include it in a loan agreement or carry it out separately), or there is a choice, but someone ticked the boxes for you instead of you, this is a clear signal that you have an unscrupulous lender. Better not to mess with him. In addition, this is a reason for a complaint to the Bank of Russia and Rospotrebnadzor .
I agreed to an unnecessary service. How to refuse it?
By law , only real estate insurance is required when applying for a mortgage. Any other policies and additional services are optional. You have the right to withdraw from them during the cooling off period . In most cases, it lasts 14 days from the date of execution of the contract. The amount of the refund depends on whether you have already started receiving paid services or not.
Please note that if you refuse some insurances and additional services, the loan rate may increase. It will be necessary to weigh what is more profitable: to buy a policy or pay an increased percentage. But the contract must necessarily spell out how the rate will change. If there is no such information in the contract, then the additional service does not affect the interest on the loan or loan.
To unsubscribe from an unnecessary service:
- submit a free-form application to a service provider, such as an insurer. This can usually be done through the company’s website or mobile app. Communication methods must be specified in your contract;
- attach copies of your passport, service agreement, as well as your bank details for a refund to the application.
Returns must be made within 7 business days. If during this time the money does not come, contact the lender who sold you the additional service. It will be possible to submit an application to the bank and MFI no earlier than 30 days after contacting the service provider itself and no later than 180 days from the date of this request. Be sure to indicate when you first submitted your return request.
If you do not have a personal contract for services, and you have been joined to a collective one, then you should immediately contact the lender. After that, the lender also has 7 working days to pay.
The money was never returned or you paid for services that should be free – complain to the financial ombudsman and to the Bank of Russia . You will learn how to file a complaint correctly from the text “What to do if your rights are violated”
