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Postal service promises to cease predatory loan practices
Published: 14 February, 2012, 20:33
TAGS: Law, Prime Time Russia, Anya Fedorova, Neil Harvey
Russia's Post Office wants to cap interest rates on the micro-loans offered at its branches.
The company has been accused of ripping off clients with huge interest rates – of over 2,600 per cent a year.
The shocking discovery was made by Russian bloggers, who published one of the Postal Service’s advertisements.
Pensioners were seduced into the dubious deals by colorful descriptions of what they could do with the money: from having new dentures made, to bribing the army so that their grandchildren will not be conscripted.
The Post Office responded by pointing out it was only acting as a middle-man for banks and micro-financing firms.
Its Director General now wants the interest rate for micro-loans to be capped at 80 per cent.
He says the damage to the Post Office's reputation far exceeds the profits from this type of business.
13.02, 22:16
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