Credit provider Tinka fined €1.76 million for irresponsible lending

The Netherlands Authority for the Financial Markets (AFM) has imposed a fine of 1.75 million euros on credit provider Tinka. The company is said to have provided credit irresponsibly and to have obtained too little information about the financial position of customers. The regulator considers this is bad, as it could cause problems for consumers.

Zwolle-based Tinka gives customers the option to pay for purchases at stores afterwards. This service is also referred to as 'buy now, pay later'. The company violated the rules against over-lending and may have lent too much money to customers. "This is serious, because too high a loan can leave consumers with too little money to pay their fixed living costs," explains AFM director Jos Heuvelman.

The AFM investigated ten cases involving Tinka. In seven cases, the lender obtained too little information about the financial position of consumers. In two cases, credit was granted that should not have been granted.

Not only are the interests of consumers harmed if credit providers do not comply with the rules, but the playing field in the credit market is also disrupted. Companies that do not responsibly provide credit can wrongly serve a larger market and thereby gain an improper advantage, the regulator said.

Tinka said it accepts the fine and says the company will not appeal. The credit provider also acknowledged "the mistakes made in the past". The company emphasized that the errors in the files were due to "unintentional deviations in the automated underwriting process". The company stated it is taking all necessary measures to prevent recurrence in the future. The lender will compensate customers who have wrongly received credit, for example by waiving outstanding repayment terms.