Meanwhile, the crisis hit Romania, generating layoffs, salary cuts, and bankruptcies, and many of those who used such financial instruments to purchase products were directly affected by the recession, and are no longer able to pay off the installments on their loans.
What happens when consumers fall behind on installment payments or even default on their loans, because they have lost their job? The options are pretty much the same in the case of the Flamingo, Domo, or Altex retailers. These are the responses provided by Cetelem and GE Money, financial institutions that work with Flamingo and Domo.
Cetelem-Flamingo
After the first month of delay in paying the installment, a penalty of four percent of the installment is applied, with the consumer reported to the Loan Bureau as defaulter. As of the second month, the penalty increases to eight percent, following which, depending on the contract clauses, the debt is subject to recovery in court.
GE Money-Domo
After the first month of delay, a daily penalty worth 0.15 percent of the installment, is applied. Following three unpaid installments, the contract is sent to a debt collection agency, which will attempt to recover the debt in court.
Credex-Altex
“We have no problems collecting installments. We do not feel the effects in our business. The money for these products was already received from financial institutions. Credex, the financial institution we are working with, has had more selective criteria for granting loans from the beginning, and now, the payment of installments is developing normally,” Chief Operating Officer of Altex, Adrian Urda, said.
