Unusually high interests, excessive fees, clients’ problems paying instalments, immediately followed by confiscation of property by executors and an auction. A number of credit companies operating in the Czech Republic practice such policies. The company ACM Money is the first that is being taken to court. According to the state prosecutor, it has caused damage to dozens of people, and its activities could be qualified as usury.
The case will go to the Prague 8 district court. The key trial is to start in autumn.
According to information available to E15, no obstacles now stand in the way for the trial to start. The state prosecutor already filed charges against the company representatives. It has also been decided what court will handle the case. “The charges state that there have been 46 attacks (credit contracts), but in a number of cases two people have been damaged by a single contract, in the case of married couples. So the total number of people affected by this is 67,” state prosecutor Marie Musílková, who is in charge of the case, told E15. Musílková has decided to file charges against Jaroslav Hlaváček, the company’s chairman of the board, who was the highest corporate representative of the company at the time. If found guilty, he could face two to five years in prison. But such a ruling would do nothing to return the money that the clients in question lost. They need to file civil suits.
“We reject any accusations by our clients, who failed to meet our company’s conditions…because we are convinced that there has been no misconduct on our part,” said Robert Valenta, ACM Money’s chairman of the board.
The company ACM Money provides mortgage loans. The trial will mainly examine expensive loans and the providing of these loans to people in difficult situations – these are the marks of usury, according to current laws. Usury is one of the pre-election topics. The KDU-ČSL, as well as the Social Democrats, are calling for increasing the rights of creditors.
State prosecutor Marie Musílková has decided to gather together the individual accusations against ACM Money, filed by clients into one law suit. “Each of these cases was investigated individually until the criminal proceedings began in mid-2008,” said Musílková. Clients tried to sue the company over fraud. “In the end we decided on usury,” she added.
In many internet forums, ACM Money is used as warning example of a company that is able to promise anything but then to also demand “anything” of its clients. Its infamy increased after a Czech Television report that featured the company’s clients talking about the hundreds of thousands of crowns they had to pay if they wanted to cancel their contract just a day after signing it or about the enormous interests that ACM Money demanded for its loans.
“This lawsuit is probably politically motivated and tied to the upcoming elections. It is an effort to criminalise legal entrepreneurial activities. We have undertaken all the possible steps to ensure that our company’s activities cannot in the slightest be considered against the law,” said Valenta, head of ACM Money.
It is nearly impossible right now to prove that usury has taken place and that the company is trying to gain the property of its clients by imposing unreasonable conditions. And it would be difficult to find the company guilty of demanding excessive interests or hidden fees. The prosecutor must prove all the marks of usury – that means the abuse of someone’s dire situation and lack of experience, as well as charging more than four times the market rate for loans.
The cost of ACM Money loans is, according to information available to E15, one of the prosecutor’s key arguments in the case.
The company demanded huge interest rates of its clients although their loans were secured through their property. This means the loans were sufficiently protected against the risk of unpaid interest fees. And this goes against the Supreme Court’s judicature.
