Strangle loans, Camibank and SAre consumer program Kassa have been in the media frequently together in the news in recent months. You could hardly ignore it. Camibank has been put to the test in several Kassa television broadcasts about its so-called strangulation credits. Kassa especially insisted on coming up with a solution, in addition to providing explanations and answers, for consumers who had once taken out such a strangulation credit. These consumers no longer see a solution themselves and have asked Kassa to help in the situation that they see as hopeless. The examples that were highlighted could be called distressing; the outstanding loan amounts are huge.
Interest rates of 10-14%
Camibank, part of the larger Creditcole, has around 150,000 customers. Part of this group still has interest rates varying between 10-14%: the so-called usury rates. And that while the current interest rates are considerably lower. Very difficult for the victims because they too want to take advantage of the favorable interest rate.
Clients of the aforementioned banks have taken out a revolving credit loan with a variable interest rate in a period that the interest rate was already high (much higher than now) or in a period after which the interest rate started to rise and the variable interest rate of their now ‘usurious credit’ is increased. They only pay interest and do not repay anything. A hopeless situation.
Solution from Camibank for strangulation credit to victims
The AFM regulator has reviewed the relevant files and considers the situation for this group of customers hopeless and undesirable because there is no alternative for this group; they are stuck.
At the insistence of foundation that collectively represents the interests of registered victims, Camibank has now converted the revolving loans for a small part of the clients into payday loans with interest rates that are on average 4.7% lower than the interest rates that were calculated. These customers now have a fixed interest rate that is below 10%. The expectation is that they will have paid off their loan within 8-10 years. The strangulation credit has been taken out of the stranglehold; Camibank’s solution to tackle strangulation loans.
There will be no further compensation for all previous years in which the customers have paid too high interest rates. Camibank has always remained within the legal rules and finds this solution sufficient. Currently, around 15,000 customers still have interest rates of 10% and higher. These are all eligible to convert their revolving credit into a payday loan, Camibank has promised. Camibank is now under a magnifying glass so can’t help but keep its word and keep the promise.
Why couldn’t people leave?
Why have victims not themselves already converted their revolving credit to a payday loan? They were not eligible because of changes in their situation such as:
- become unemployed
- become incapacitated for work
- work less
- start earning less
- received more other expenses
- increased rent / mortgage
- have children
- additional loans
- credit card taken
- are in red
Due to one or more of the above reasons, they could not leave the “old” banks. With the result that these customers are currently still subject to a high variable interest rate despite the current low interest rates for revolving loans. This is due to the fact that many of the above banks are no longer active and only manage current revolving loans.
Most payday loans that have ever been taken out with the ‘old’ banks have ended and ended, but the revolving loans are still continuing. This is due to the rising interest rates that have ensured that the term of the revolving credit has become longer and longer. Clients who were able to convert their revolving credit with rising variable high interest rates into a payday loan have now been canceled.
A small proportion of customers have been helped. Now the rest.