The legal protection of consumers when concluding consumer credit agreements is one of the priorities and goals of the Republic of North Macedonia directed towards creating a single market, harmonized with the overall legislation of the European Union.
The Law on Consumer Protection in Case of Consumer Credit Agreements (“Law”) already provided that the creditor must provide appropriate information to the consumer which will enable the consumer to reach a decision to conclude the credit agreement. However, the Law gave creditors the opportunity to calculate high fees and commissions when approving consumer credits. Also, consumer credits in an amount less than EUR 200, in MKD counter-value, were not considered “consumer” credits resulting in lack of consumer protection.
In order to harmonize legislation, the Assembly of the Republic of North Macedonia recently adopted amendments to this Law, which entered into force on 07 February 2019. However, they are also applicable to all procedures for concluding consumer credit agreements that were initiated before 07 February 2019.
The purpose of the amendments is to provide better consumer protection for the beneficiaries of the mentioned credits, mainly by:
- Limiting the annual percentage rate of charge (“APR”); and,
- Enabling the implementation of the Law to credit agreements for amounts less than EUR 200 in MKD counter-value, and to credit agreements for which the consumer deposits an object with the creditor.
The amendments stipulate that the APR can be up to five times higher than the legal penalty interest rate stipulated in the Law on Obligations, applicable to agreements in which at least one of the parties is not a commercial entity. Prior the new regulation, this rate could exceed 200% in practice. The amendments concerning the APR will enter into force starting 06 April 2019.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.