Interest, fees and taxes have to be notified to the creditor
Under the Consumer Credit Act, Article 2, paragraph (1), item (7), total loan cost payable by credit user, in addition to interest and fees, also includes taxes. The elements of total loan cost, i.e. interest, fees and taxes should be notified to the creditor. This Act specifically prohibits only the imposition of new fees once the agreement is entered into. The total amount payable by the consumer, under Article 2, paragraph (1) item (8) of the Act, is the total loan amount and total loan costs. Certain loan costs cannot be quantified at the time of entering into an agreement, such as for instance, total interest cost in case of a variable interest rate, or the cost of tax if non-existent at the time of entering into the agreement. However, if a tax is introduced and thus becomes known to the creditor, under applicable legislative provisions, it will constitute an integral part of the total loan costs payable by the consumer.
The Consumer Credit Act and the mentioned provisions have been aligned with EU legislation, i.e. Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC (OJ L 133 22.5.2008). Under this legislation the inclusion of any tax cost that may be introduced and is payable by loan user, in accordance with Article 2, paragraph (1), items (7) and (8) of the Consumer Credit Act, cannot in itself be considered to be unlawful conduct on the part of the banks.
