Dance, you have a loan – Newspaper Kommersant No. 52 (7497) dated 03/28/2023

A draft has been submitted to the State Duma for consideration, obliging creditors to notify citizens through the State Services portal that a loan or loan agreement has been drawn up in their name. The initiative is aimed at combating fraud, but is incomplete, experts say. In their opinion, the measure will be more effective if informed after approval, but before the loan is issued. The Central Bank, on the other hand, believes that self-prohibition of loans and borrowings in the credit history (CI) is sufficient to protect citizens.

A bill providing for automatic notification of citizens about a loan or loan issued in their name through the State Services portal, introduced to the Duma by the New People party on March 27. The deputies are confident that such a measure will “not only ensure the protection of the rights of citizens, but also help credit and microfinance organizations (MFIs) to more effectively fight fraud.”

As noted in the explanatory note to the project, in 2022, 5% of citizens found fraudulent loans in their name when checking credit histories. In Moscow and the Moscow Region, there were 8% of such citizens.

Most of the creditors interviewed by Kommersant did not respond to inquiries. Only VTB supported the initiative, calling it effective in combating fraudsters. It will allow the user to centrally receive information on credit loans from different financial institutions in one system and quickly respond to any changes in the data, they noted.

But experts doubt the usefulness of the bill. The measure cannot be effective on its own, as the bill assumes that information about the loan will be provided after its issuance, says Stanislav Danilov, partner at the Pen & Paper Bar Association.

This will become clearer during the discussion of the bill, says Anatoly Aksakov, head of the State Duma committee on the financial market. “But it would be more logical to notify the client of a financial institution about a loan in his name, not when the money has already been issued, but at the time the loan is approved, when the issuance process can be stopped if the borrower’s documents were used by attackers,” he believes.

However, if the borrower does not have a profile on Gosuslugi, or a valid contract with a mobile operator is not linked to his profile, or the number is incorrect, he simply will not receive a notification from Gosuslug that an agreement with a bank has been concluded on his behalf or MFI, adds Dmitry Gorbunov, a partner at Rustam Kurmaev & Partners. “The measure would work against fraudsters only if the further conclusion of the contract would be impossible without confirmation from the recipient of the notification,” Mr. Gorbunov is sure.

It is impossible to exclude the interception of credentials by fraudsters, Elman Mehdiyev, deputy chairman of the Central Bank’s expert council for protecting the rights of consumers of financial services, warns. “The solution to the problem could be the introduction of two-factor identification, regular checks of their credit history by individuals, the use of the “second key” practice, which implies the presence of a trustee,” he lists.

The Central Bank is confident that citizens should think about their own protection.

“We have already proposed the introduction of a self-prohibition mechanism for loans and borrowings, which will apply to all professional lenders (and not just the bank in which a person has an account). To do this, it will be necessary to fix a special prohibition in your credit history, they explained. Banks and MFOs will have to check the presence of such self-restriction in the borrower’s CI before issuing loans and loans. If such a prohibition is established, the creditor will have to refuse extradition. If, despite the prohibition, a consumer credit or loan agreement is concluded, the lender will not be able to demand that the borrower fulfill its obligations.

A person who wishes to use this option will be able to cancel it if he really intends to receive a loan or a loan, and the maintenance and removal of self-ban will be free and unlimited in number, the Central Bank added. The corresponding draft law has passed interdepartmental coordination, discussed with the market and is being prepared for submission to the State Duma.

Polina Trifonova, Maxim Buylov