Veselin Zlatev: CPC plans inspections of hotels and mobile operators

Mr. Zlatarev, which of CPC inspections this year have had the greatest impact in terms of protecting consumers’ health and financial interests?

Since its inception in 1997, the Commission for Protection of Consumers (CPC), though with a different name in its early days, has never made a thorough inspection and analysis of the financial services sector till now. That includes everything from general terms and conditions of mortgage contracts and consumer credits from banks, non-bank financial institutions and leasing companies (which will be scrutinised before the end of the year). Come the middle of January, we will probably have finished analysing the general terms and conditions of contracts between insurance companies and their customers.

Inspections of different sectors were a serious undertaking, considering the complexity and idiosyncrasies of the bank and insurance business. Let’s not also forget the relatively limited number of CPC staff. I believe our efforts have brought about real benefits for consumers. This is especially true with respect to the banking sector, where general contract terms are now clearer, more transparent and verifiable, not to mention that banks will no longer be able to interpret and enforce contracts unilaterally, while the possibility of demanding credit repayment in advance has been significantly reduced. In a number of cases, compensation that has been too high for debtors has been reduced.

I would say that the biggest change from the consumers' viewpoint has come not so much from inspections triggered by complaints, although, of course, the commission pays the same attention to every single case, but from sector analysis - a systemic and profound look into everything that represents a serious daily drain on Bulgarians’ finances. I’m talking about analyses of non-bank institutions, as well as ongoing and upcoming analyses of other sectors in addition to banking.

Can you give us an account of the inspections CPC has performed throughout the year and the total number of complaints it has received?

CPC was especially active this year in its ambition to serve consumer interests as best it can in this time of economic crisis. In the past 11 months, we carried out more than 30,000 inspections on our own initiative. So far, we have received around 10,800 complaints against various retailers and manufacturers, 2,000 of which were referred to other bodies like the Communications Regulation Commission, the State Energy and Water Regulatory Commission and others. So, we worked on about 38,000-40,000 complaints on top of sector analyses. Given the fact that CPC has a 176-strong staff, I’d say this has been a really arduous and complex task.

How is the review of non-bank financial institutions offering the so-called express credit of up to BGN 5,000 progressing?

There are more than 200 of these institutions registered in Bulgaria, although some of them do not actually perform such services. We were unable to reach some of these firms at their office address. So far, we have checked 33 firms with a combined market share in the micro crediting sector of about 75%. With thirty of them, we found a clause in the general terms and conditions section of their standard contracts that puts consumers at a disadvantage, mostly regarding sizeable forfeits. In some cases, it is only one or two but some firms have four or five unfair clauses.

Are the preliminary results of the mobile operators inspection ready?

The inspection is almost over. In the year to date, around one-third of the complaints we received were related to some type of consumer rights violations by the mobile operators. We found quite a lot of unfair clauses in the general terms in their contracts and we made recommendations to rectify the situation.

Do you think that the sanctions which CPC is legally allowed to impose are big enough?

In my opinion, the sanction for repeated use of unfair commercial practices which the law sets at BGN 5,000 is not nearly enough in some cases. A penalty of BGN 5,000 or even BGN 10,000 doesn’t make a dent on firms with tens of millions in annual turnover. In certain instances, the maximum amount a firm can be charged should be raised dramatically, if we are to discipline unfair retailers.

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