A loan shark is a person who provides loans at an obscenely high interest rate, and unfortunately often takes advantage of the loan applicant’s unfavourable situation.
What is usury?
Usury is also sometimes referred to as usury and is an obligation that is disproportionate to the gain obtained by the obligation. It is often associated with non-banking institutions, as interest rates can be in the higher tens or hundreds of percent per annum.
High fees, unrealistic repayment terms and late payment penalties are also often hidden in a loan agreement from a loan shark.
Did you know that all loan providers in the Czech Republic have to be licensed by the CNB, so usury is operating on the edge of the law here?
Usury and the Criminal Code
Section 218 states who is a usurer and what the penalties are for such conduct. A usurer is defined here as one who takes advantage of someone’s weakness, distress, inexperience, recklessness or excitement and promises to himself or someone else a benefit whose value is grossly disproportionate to the value of the consideration. Similarly, a person shall be deemed to be a usurer who asserts or transfers such a claim to himself with the intention of asserting it.