Latvia lifts ban on consumer credit advertising, adds stricter rules
Amendments to Latvia's Consumer Rights Protection Law took effect on August 19, lifting the ban on advertising consumer loans while introducing stricter content requirements and extending the hours when credit agreements cannot be signed. Further consumer information rules take effect on September 27.
As of August 19, Latvia has changed its regulation of consumer lending, lifting the ban on advertising consumer credit that had been in place since 2018. According to the explanatory notes accompanying the amendments, the earlier ban proved disproportionate and restricted competition, since it favored lenders already established in the market, while in practice it was circumvented by adding disclaimers to advertisements.
New advertising requirements
While credit advertising is now permitted again, the law sets new content requirements: information must be honest, clear and not misleading, and ads may not create unjustified expectations about a loan's availability or cost. Advertisements deemed to encourage irresponsible borrowing — for instance by urging people to take loans regardless of their financial situation, or suggesting borrowing carries no risk — will be banned. It also remains prohibited to advertise loans to people with negative credit histories, short-term loans repayable within 30 days, or the option to extend a loan's repayment term. Ads must include the mandatory warning "Warning! Borrowing costs money," occupying at least 10% of the ad. Where an advertisement states an interest rate or other numerical cost figures, it must also disclose the annual percentage rate, total loan amount and other cost indicators.
Longer restricted hours and new protection for young borrowers
The period during which credit agreements may not be signed has been extended from 23:00–7:00 to 21:00–8:00. Protection for borrowers aged 18 to 20 has also been strengthened: if a loan is issued to someone in this age group without a proper assessment of their ability to repay, the lender will not be entitled to reclaim even the statutory interest. Lenders will be able to obtain data from the Population Register on a person's age and legal capacity to better assess creditworthiness.
Other changes
The amendments introduce rules on consumer rights when an unsafe product is recalled from the market, allowing consumers to seek repair, replacement, or an appropriate refund. Failure to display a product or service price can now be met with either a warning or a fine, rather than a fine alone, when the violation is minor. From September 27, requirements under the EU's Green Transition Directive will also take effect, obliging traders to inform consumers about warranties, repairability indexes and the minimum period for software updates.
