The Alternative Financial Services Association of North Macedonia
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Code For Good Practice

Code For Good Practice

Introduction

This Code for good practice (hereinafter referred to as “Code”), approved at the Assembly held among the members of the organization Association for Research and Advancement of the Market of Non-Bank Consumer Loans AFD 2019 Skopje (hereinafter referred to as – “Association”) is a summary of the basic principles that the members of the Association apply in performing their activities.

The purpose of this Code is to provide additional protection to the interests of consumers who have received or expect to receive service from members of the Association. This Code includes guidelines for fair commercial practice and criteria for professional diligence, in accordance with fair market practices, goodwill, and responsible lending principles that are generally accepted by the non-bank credit industry.

The members of the Association work in accordance with the principles of this Code. The Code’s rules in its current version are available on the website of the Association www.afd.mk.

With the approval of this Code, the Consumer Charter, which is given in Appendix 1 to this Code, is approved as well. The Consumer Charter is a document addressed to the clients of the Association members, which contains a shortened version of the principles of the Code and expresses the goodwill and dedication of the members of the Association in maintaining relations with their clients.

The members of the Association use the logo of the Association in a prominent place on their websites, a link to the Association’s Web site, this Code, the Consumer Charter and other documents of the Association, thus confirming their compliance with this Code. The members of the Association enable all persons who are interested in obtaining credit from members of the Association to have access to the rules of this Code and the Consumer Charter without compensation.

1. GENERAL PRINCIPLES OF ASSOCIATION’S MEMBERS’ ACTING

1.1. The members of the association legally perform the activity in accordance with the normative acts related to their activities, judicial practice, decisions, instructions and guidelines of the supervising institutions, such as the Ministry of Finance, the Directorate for Personal Data Protection, etc.

1.2. The members of the Association guarantee that they perform activities with due professional care, ie in accordance with the generally accepted fair market practice in the field of non-bank lending, the principle of goodwill and doing business, responsibly and cautiously.

1.3. The members of the Association are aware that with each activity in their work, their actions have an impact on the Association and the reputation of the whole industry, thus they shall refrain from any action that can negatively affect the reputation of the Association and the industry.

1.4. The members of the Association perform the business honestly and ethically, and treat their clients fair. In all loan transactions with clients, members of the Association provide sufficient information and, where possible, ensure that their partners also comply with those standards of action.

1.5. The members of the Association provide appropriate training for their employees, so that employees can ensure fulfillment of the requirements of this Code in the performance of their duties.

2. LOAN GRANTING AND PAYMENT

2.1. The members of the Association always act with good intent and responsibility in accordance with the principles set forth in this Code, in order to promote responsible borrowing by the clients, to assess their financial conditions and the ability to fulfill their obligations.

2.2. The members of the Association guarantee that each client is provided with the necessary information about the nature of the loan, including the fact that loans are not recommended for solving pre-existing financial difficulties.

2.3. Before granting a loan, any member of the Association shall invest the best of their efforts to check whether the loan, if approved, meets the specified material circumstances of the client and at the request of the client, to clarify which information will be taken into account in the decision to approve the loan.

2.4.  They guarantee the adequacy of the approved loan with the financial terms of the buyer and prevent the client from taking on unnecessary financial obligations; each member of the Association at the time of issuing the loan must ensure that the solvency of the client is in accordance with the legislation and the use of personal credit risk.

2.5. In order for the client to assess whether the terms of the proposed loan correspond to his needs and financial condition, before signing the loan agreement or issuing the loan, each member of the Association:

2.5.1. provides the clients with information that are needed for them to compare different offers and to make an appropriate decision to obtain a loan;

2.5.2. gives the client clear and unambiguous information on the total costs of the loan, the rules and the manner of repayment of the loan, and the consequences that will arise if the client fails to comply with the terms of the contract;

2.5.3. Informs the client of his legal right to cancel the loan;

2.5.4. shall always provide the client with the necessary explanation of the loan conditions and other information to be provided to the client in accordance with the law (including details of payments made by the client).

2.6. Each member of the Association ensures that the loan agreements contain all the information and provisions provided by the normative acts and are prepared in a simple and understandable language.

2.7. The members of the Association shall explain to the clients the manner in which they can contact the creditor for the duration of the loan agreement, and indicate the channel of communication with the client (by phone, e-mail, SMS or directly online). At the request of the client, the members of the Association shall always notify the client of any payment or change of terms of the loan (if the terms of the loan foresee such changes) via an email, SMS or telephone.

2.8. In cases where there is an amortization plan for the repayment of the loan, the members of the Association shall ensure that they take into account the regular payments that should be made within the amortization plan to suit the financial position of the client.

2.9. The client receives accurate information about the costs related to the loan in accordance with the individual rules of the members of the Association.

2.10. The members of the Association guarantee the confidentiality of personal data received from the client and before obtaining such data, the members of the Association shall inform the clients about the purposes for which their personal data will be used. Data received from customers are disclosed to third parties only in cases provided by law.

2.11. The members of the Association guarantee that the personal data processing systems they use are in accordance with the requirements of the law.

3. DEBT COLLECTION

3.1. The members of the Association guarantee that their behavior in relation to debt collection is in accordance with high ethical criteria, providing best practice in the industry in accordance with the cooperative form of cooperation with clients with financial problems. Any problem of debt collection is solved by assessing the actual situation.

3.2. All members of the Association ensure that customers are familiar with the obligation to contact the creditor immediately in case of financial problems, and members of the Association guarantee that their employees will treat the clients with understanding.

3.3. In case the client misses the payment deadline there is an immediate communication with the client to determine the reasons for the delay. In case the client informs him that he has unexpected financial difficulties, the members of the Association will make efforts to create a payment agreement that corresponds to the client’s ability to resolve the situation.

3.4. In cases where members of the Association forward the client’s case of a debt collection to the services for a debt collection, the client shall also be notified of this.

3.5. The members of the Association, on their own discretion, have the right to transfer the debt collection activities to debt collection companies, in which case they will endeavor to choose only licensed debt collection companies whose business is in compliance with high professional standards.

4. ADVERTISING AND MARKETING

4.1. In performing advertising and marketing activities, the members of the Association guarantee that they will fulfill the regulatory requirements of the normative acts that regulate non-bank lending, advertising, commercial practice, information services and the Code of Good Practice.

4.2. The members of the Association guarantee that the measures undertaken for promotional and marketing events promote responsible borrowing.

4.3. The members of the Association will carefully evaluate the advertising and marketing activities and contents that can adversely affect the economic behavior of the consumer groups who, due to their mental or physical condition, age or unjustified trust (also lack of experience or knowledge) are considered to be particularly vulnerable debtors.

4.4. The marketing activities where clients are addressed individually (for example, sending commercial communications to customers via e-mail or text message, etc.), when used by members of the Association, are used warily and cautiously, ensuring they do not аnnoy the customers unnecessarily, always pointing to the possibility of free withdrawal of the consent to obtain further commercial communications in a way that is simple and easy for the client.

5. PROCEDURE FOR APPEAL AND COMPLAINTS

5.1. The members of the Association determine their procedures for handling appeals and complaints from the clients, guaranteeing that they will contain the following minimum principles for dealing with complaints:

5.1.1. The client’s complaints are resolved within a period of no more than 5 (five) working days;

5.1.2. Immediately notify the client, if necessary, for the additional time needed to consider the complaint;

5.1.3. The client is informed that in case of a negative outcome of the appeal procedure, he has the right to address to and inform the Association;

5.1.4. The aforementioned complaint procedure does not limit the rights of the clients and members of the Association to invite the relevant supervisory institutions and the court.

5.2. The members of the Association shall mutually discuss the grounds of the complaints from the clients on an anonymous basis within the sessions of the Assembly of the Association, together with the information on the appeal procedure and the status of resolving.

5.3. The members of the Association shall notify their clients about the possibilities regarding the complaint as follows:

5.3.1. ensure that complaint handling information as well as a helpline is posted on the website in a visible place, or in the contracts with the clients, or in the business premises of the members of the Association and the Customer Service Centers;

5.3.2. At the request of the client, information on the complaint handling policy, as well as the free telephone assistance service, is provided free of charge to the client in writing.

5.4. The Association is obliged to immediately respond to the complaints of the clients of the members of the Association, but no later than 5 (five) working days; In case it takes extra time to make an analysis, the Association will immediately notify the client. Assistance from the Association of the clients of the members of the Association is free of charge.

Annex 1

to the Code of Good Practice of the organisation Association for Research and Advancement of the Market of Non-Bank Consumer Loans AFD 2019 Skopje

 Consumer Charter

This Consumer Charter is intended for clients who are considering applying for a loan from a lender, which is a member of the Association for Research and Advancement of the Market of Non-Bank Consumer Loans AFD 2019 Skopje (hereinafter referred to as the “Association”).

The members of the Association shall apply the principles stipulated in the Consumer Charter for all agreements between the clients and the members of the Association upon the member’s admission to the Association and, as far as possible, on the contracts concluded before the reception.

By concluding this Consumer Charter, as members of the Association, we are committed to acting in accordance with this Consumer Charter. Our actions shall be independently monitored to ensure that we act in accordance with the adopted Code of Good Practice. The monitoring of the actions will be guaranteed by our jointly established Association.

Basic commitments of the Association

 When issuing loans, we:

  1. We will always be honest and responsible in accordance with the principles set forth in this Charter, to promote your responsible borrowing, to evaluate your own financial situation and the ability to fulfill your obligations.
  2. Before concluding a loan agreement, we will explain the nature of the loan, including the fact that it is not advisable to resolve previous financial difficulties with a loan.
  3. Before approving the loan, we will check whether the loan, if approved, would correspond to the stated material conditions.
  4. In order to guarantee the adequacy of the loan with your financial conditions and to avoid undertaking undue financial obligations, we will check your solvency, which we will assess in accordance with the laws, but also by using each of our individual models of credit risk assessment.
  5. In order to assess the suitability of the proposed loan for your needs and the financial situation, before you enter into a loan agreement or loan issue:

5.1. we will provide you with the information needed to compare different offers and make the appropriate decision to receive the loan;

5.2. We will give you clear and unambiguous information on the total cost of the loan, the rules and procedures for payment of the loan, and the consequences that will arise if you fail to comply with the rules of the concluded contract;

5.3. we will notify you about the rights provided by law and the normative acts that enable you to cancel the loan;

5.4. we will always give you the necessary clarifications about the terms of the loan and other information that you legally need to receive (including details of your payments)

  1. We will guarantee that the loan agreement will include all the information and provisions in the normative acts, and that they are prepared in a simple and understandable language.
  2. We will explain to you in which way you can contact us during the duration of the loan agreement and also the way in which you will be contacted (by phone, email, SMS or online). At the client’s request, we will always promptly notify the client about the maturity or changes in the interest rate on the loan (if the terms and conditions of the loan foresee such changes).

Should you have any issues with the payment of the loan:

  1. In the event of a payment delay, we will contact you to determine the reasons for the delay. In case you notify us that you had unexpected financial difficulties, our employees will act with understanding.
  2. In case of a belated payment of the loan, we will offer a solution based on the information we have about your solvency.
  3. We will facilitate the practice to the highest possible extent, in the event of belated payment, to reach agreement with the client for voluntary debt payment. In case you show a desire for cooperation in solving the difficulties that arise, we will refrain from contacting the debt collection services.
  4. In the event that we refer your case to debt collection services, we will notify you of the same. When selecting a debt collection service, we will always select only licensed out-of-court debt collection services.

If you want to submit an appeal or a complaint about the services:

 At your request, we will explain the complaint procedure and we will hand it over to you in writing. We will publish information about our complaint handling policy on our website, and we will publish it in our business premises and customer service centers.

  1. We will ensure that your complaint will be processed within 5 (five) business days, and if necessary, a further investigation is carried out, we will notify you of the same.
  2. We will cooperate with you if you want to file your complaint about our actions in our Association at: Association for Research and Advancement of the Market of Non-Bank Consumer Loans AFD 2019 Skopje, 109A, Jane Sandanski Blvd., Floor 3, Skopje.