LEGAL NOTE

UNDERSTANDING THE ONLINE LENDING IN SPAIN.

1. OPERATING AS LENDER FROM POLAND FOR SPANISH BORROWERS.

Regarding the Spanish and UE regulation lending companies can operate lending to Spanish borrowers from abroad, from a UE country based on Act 22/2007, of July 11, on distance marketing of financial services, which allows specifically in its Article 2. This Law shall apply to contracts for financial services provided by credit institutions. Allows to do so lend as long as the lending company complies with the local consumer lending and specific local regulation.

Taking into account the provisions of article 3 of Law 34/2002, will also apply to service providers established in another Member State of the European Union or of the European Economic Area when the recipient of services is located in Spain and the following subjects are affected: c) Obligations born of contracts concluded by people who have the status of consumers.

 

2. REGARDING THE CONSIDERATION OF THE PARTIES.

 

Article 5. The parties.

The parts of the distance contract are the supplier and the consumer.

Any natural or legal person, private or public, who, in the framework of his commercial or professional activities, provides a financial service at a distance is considered as a provider. For the purposes of this Law, it is considered as suppliers who intervene on their own behalf as intermediaries at any stage of marketing.

For the purposes of this Law, natural persons who, in the distance contracts, act as a non-commercial purpose for their business or professional activity are considered as consumers.

 

3. THE LENDING COMPANY WILL OPERATE UNDER THE ACT 34/2002 OF 11 JULY ON INFORMATION SOCIETY SERVICES AND ELECTRONIC COMMERCE.

 

Also note that according to Article 3 From, Law 34/2002 of July 11, the lending company is under the Spanish regulation as Service providers established in another Member State of the European Union or of the European Economic Area.

1. Notwithstanding the provisions of articles 7.1 and 8, this Law shall apply to providers of information society services established in another Member State of the European Union or the European Economic Area when the recipient of services is located in Spain and the services affect the following subjects:
2. d) Obligations born of contracts concluded by natural persons that have the status of consumers.

 

4. BORROWERS WILL BE COVERED BY THE CONSUMER CREDIT REGULATION 16/ 2011 RIGHTS.

 

The Law applies to those contracts in which the lender grants or undertakes to grant a consumer a credit in the form of deferred payment, loan, opening credit or any equivalent means of financing. Consumers’ consideration is limited to natural persons who act in a non-commercial environment or professional.

 

Art.5. It is considered that the lender has met the information requirements of sections 1, 2 and 3 of this article and of sections 1 and 2 of article 7 of Law 22/2007 of July 11, on distance marketing of financial services aimed at consumers, if it facilitates the European Standardized Information on consumer credit.

 

5. THAT MEANS CONTRACT MUST INCLUDE THE FOLLOWING INFO: CALLED “STANDARD EUROPEAN CONSUMER CREDIT INFORMATION”.

 

This contains the best possible analysis of the terms and conditions of the contract that you are considering. The document includes:

 

• The main characteristics of the contract.
• The amount of the loan and the cost.
• The annual percentage rate (APR, a single figure equivalent to the total cost of the credit: interest, commissions, taxes and any other type of expenditure).
• The number, the frequency and the amount of all the payments.
• A note on the significant legal aspects described below.

 

Annex II European standardized information about the credit to the consumer 1. Identity and contact the lender and/or broker details.

Lender address phone number (*) email (*) number of fax (*) address of web page (*) [identity] [consumer use social address] if place, intermediary credit address phone number (*) email (*) fax number (*) address of web page (*) [identity] [consumer use social address] (*) these details are optional for the lender.

Otherwise “if place», the lender will have to fill the section if the information is relevant to the credit product, but if the information is not relevant for the type of credit in question, you must delete the data or the entire section.

Instructions that are enclosed in brackets are an explanation for the lender that have to be replaced with the corresponding information, 2. Description of the main features of the credit product.

Type of credit total amount of the credit is the maximum amount or the sum of all the quantities made available to consumers in the context of a credit agreement.

Conditions governing the provision of funds.

I.e., when and how the consumer will get the money.

Duration of the contract of credit terms and, where appropriate, the order in which there will be payments in instalments.

Should you pay the following: [the amount, number and frequency of payments that has to make the consumer] interest and/or charges to be paid by the consumer in the following manner: total amount you should pay is say, the amount of the capital borrowed more interest and possible costs related to its credit.

[Sum of the total amount of the credit and the total costs of the credit]

If you place, the credit is granted in the form of payment deferred for a good or service or is linked to the supply of specific goods or the provision of a service.

Name of the product/service price in cash if it has place, guarantees required description of the warranty that you offer in relation to the credit agreement.
[Warranty type).
If you place, refunds are not immediate amortisation of the capital.

3. cost of credit.

The debtor type or, if place, debtor types that apply to the credit agreement [% – fixed or – variable (with the index or reference rate applicable to the initial debtor type) – periods] equivalent annual rate (APR) the TAE is the total cost of credit expressed as annual percentage of the total amount of the credit.

The TAE is used to compare different offers.

[ %. Here will be a representative example that includes all of the assumptions used to calculate the rate] is compulsory to obtain the credit itself, or in the conditions offered, – an insurance policy guaranteeing credit, u – other accessory service take?

If the costs of these services are not known to the lender, are not included in the Apr.

Yes/no; [in if yes, type of insurance]

Yes/no; [in if yes, type of accessory service]

Related costs if you place, to maintain one or several accounts recording both payment transactions and the provision of the credit if it has required place, amount of costs for using a specific payment (e.g. a credit card) media if it has place, other costs deriving from the credit agreement.

If you place, conditions that can be changed above costs associated with the credit agreement if it has place, mandatory notary fees.

Costs in the event of the non-realization of payment arrears can lead to serious consequences (e.g. forced sale) and make obtaining a credit.

You must pay [… (tipo de interés aplicable y acuerdos para su ajuste y, si procede, gastos por impago)] by late payments.

4. other important legal aspects.

Right of withdrawal you have the right to withdraw from the credit agreement within the period of 14 calendar days yes/no early repayment you have the right to repay “anticipadamente” the credit total or partially at any time if you place, the lender has the right to compensation in the event of early repayment [determination of the compensation (calculation method) in accordance with article 30 of the law of contracts of credit consumption] consultation of a database the lender must inform you immediately and without charge of the result of a consultation of a database if the request for credit on the basis of a consultation of this type was rejected. This does not apply if the dissemination of such information is prohibited by a law or by the law of the European Union or is contrary to objectives of public policy or public security.

Right to a draft credit agreement you have right, on request, to obtain a copy of the draft credit agreement free. This provision shall not apply if at the time of the request, the lender is not ready to celebrate with you the credit agreement.

If you place period during which the lender is bound by the pre-contractual information.

If you place, this information is valid from… to..

5. additional information in case of distance marketing of financial services.

(a) relative to the lender if it has place,

Representative of the creditor in your Member State of residence address telephone number (*) email (*) fax number (*) address of the web page (*) [identity] [consumer use social address] If you place, registration [the trade register in which it is registered the lender and your registration number or a means of equivalent identification in that register] if place, b supervisory authority) concerning the credit agreement if you place , Exercise of the right of withdrawal [practical instructions for exercising the right of withdrawal indicating, inter alia, the period for the exercise of this right; the address to which the notification of the right of withdrawal; should be sent the consequences of not exercising the right of withdrawal] if place, legislation which the lender accepts as a basis for the establishment of relations with you before the conclusion of the credit agreement.

If you place, clause applicable legislation that governs in relation to the contract of credit and/or competent court.

[Here the relevant clause shall appear]

If you place, linguistic regime information and contractual terms will be in [language]. With your consent, for the duration of the credit agreement we will contact you in [language or languages] c) relative to the resource existence and access to out-of-court procedures of complaint and appeal [if it exists or not access to out-of-court procedures of complaint and appeal to the consumer who is party to the contract to distance, and, if so, how can the consumer to access them] (*) these details are optional for the European annex III information lender of For consumer credit: 1. Discovery.

2 consumer credit offered by certain credit organizations (article 2, paragraph 5, of Directive 2008/48/EC).

3. conversion of debt.

1. identity and contact details of the lender/credit intermediary.

Lender address phone number (*) email (*) number of fax (*) address of the web page (*) [identity] [consumer use social address] if place broker credit address phone number (*) email (*) fax number (*) address of the web page (*) [identity] [consumer use social address] (*) these details are optional for the lender when prompted “if place» the lender will have to fill the section if the information is relevant to the credit product, but if the information is not relevant for the type of credit the question, you must delete the data or the entire section.

Instructions that are enclosed in brackets are an explanation for the lender that have to be replaced with the corresponding information.

2. Description of the main features of the credit product.
Type of credit total amount of the credit is the maximum amount or the sum of all the quantities made available to consumers in the context of a credit agreement.

Duration of the credit agreement if you place, you can be requested the reimbursement of the amount of the loan in its entirety, upon request, at any time.

3. cost of credit.
Debtor type or, if place, debtor types that apply to the credit agreement [% – fixed or – variable (with the index or reference rate applicable to the initial debtor type)] if it has place, equivalent annual rate (APR) (*) the TAE is the total cost of credit expressed as annual percentage of the total amount of the credit. The TAE is used to compare different offers.

[% Here shall be a representative example that includes all of the assumptions used to calculate the rate]

If you place, costs if you place, conditions in which these expenditures may be modified [costs applicable at the time when the credit agreement was held] costs in the event of late payments you must pay [… (tipo de interés aplicable y acuerdos para su ajuste y, si procede, gastos por impago)] by late payments (*) not applicable to contracts of credit in the form of possibility of discovered and which shall be refunded upon request or within a maximum period of three months.

4. other important legal aspects.

Termination of the credit agreement [conditions and procedure to put an end to the credit agreement] consultation of a database the lender must inform you immediately and without charge of the result of a consultation of a database if the request for credit on the basis of a consultation of this type was rejected. This does not apply if the dissemination of such information is prohibited by a law or by the legislation of the European Union or is contrary to objectives of public policy or public security.

If you place, period during which the lender is bound by the pre-contractual information if you place, this information is valid from… to…

5 additional information if the pre-contractual information provide certain credit organizations (article 2, paragraph 5, of Directive 2008/48/EC) or is offered for a credit to the consumer for the conversion of a debt.

Instalments and, where appropriate, the order in which these time limits will be allocated.

The following must be paid: [representative example of a picture of deadlines including the amount, number and frequency of payments by the consumer] total amount should you repay early repayment you have the right to early repay the credit fully or partially at any time.

If you place, the lender has the right to compensation in the event of early repayment if you place, [determination of the compensation (calculation method) according to article 30 of the law of contracts of credit consumption] 6. Additional information in case of distance marketing of financial services.

(a) relative to the lender if it has place, representative of the lender in the Member State of residence address telephone number (*) email (*) fax number (*) web site (*) [identity] [social address to be used by the consumer] if place, registration [the trade register in which it is registered the lender and your registration number or a means of equivalent identification in that register] if place (, B supervisory authority) concerning the right of withdrawal credit agreement you have the right to withdraw from the credit agreement within a period of 14 calendar days.

If you place, exercise of the right of withdrawal yes/no [practical instructions for exercising the right of withdrawal indicating, inter alia, the address to which the notification of the right of withdrawal and the consequences of not exercising the right of withdrawal should be sent] if place, the law chosen by the lender as a basis for the establishment of relations with you before the conclusion of the credit agreement if you place , Clause on the law applicable to the contract of credit and/or competent court [here the relevant clause shall be] if place, linguistic regime information and contractual terms will be in [language]. With your consent, for the duration of the credit agreement we will contact you in [language or languages].

(c) concerning the resource existence and access to out-of-court procedures of complaint and appeal [if it exists or not access to out-of-court procedures of complaint and appeal to the consumer who is party to the contract to distance, and, if so, how can the consumer to access them] (*) these data are optional for the

 

Users and consumers:

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.

Law 3/2014, of 27 March, modifying the Spanish general law for the defense of consumers and users

 

6. PERSONAL DATA PROCESSING. GDPR.

 

The web site must include a Privacy Policy with the reason for the registration, the way in which data is collected, treated and ensured the protection of all personal data provided, how that information is used and what rights can be exercised in relation to your data (rights of access, rectification, opposition, removal (“right to oblivion “), limitation of treatment, portability and not to be the object of decisions based solely on the automated treatment of  data, in the terms established in articles 15 to 22 of the RGPD). If you already have a DP officer and a procedure, indicate it along the Terms and Conditions.

 

1. Accept T&Cs and Privacy policy

• When your customer has completed their registration, they have to accept your T&Cs and Privacy Policy.
• You need to implement 2 separate tick boxes (or click buttons, or similar): for T&Cs and for Privacy Policy; and you cannot pre-tix them. The customer must actively accept each of them.
• This is the moment when the customer becomes a customer and data can be stored, send them a welcome email, confirm their registration, send them reminders, place cookies for security (or marketing) purposes, if your Privacy Policy discloses this fact. From this moment on, you have an obligation to protect their account security and integrity.
• Sending an email confirmation 
Send a message to the customer confirming that their account has been registered. Ask for email confirmation (if not done so before). Now you can add instructions on how to activate the account, how to add a payment instrument, navigate the website, how to contact the support team, etc.

 

 

7. CLAIMS HANDLING PROCESS:

 

Borrowers can use the alternative dispute process under the  Law 7/2017, of 2 November on the implementation of the Directive 2013/11/EU of the European Parliament and the Council of 21 May 2013, on alternative dispute resolution for consumer disputes.

 

Royal Decree 231/2008, of 15 February, which regulates the Consumer Arbitration System.

 

A reference in the Terms and Conditions must be included regarding the European Consumer Centre for claims resolution:

 

1. Claim Process handling:

Company must enable a procedure for claim reception and solving in maximum 30 days

Escalate those that can trigger legal procedure/ court procedure.

Flag those related to fraud cases.

 

Indicate in the Terms and Conditions that there is an  Alternative Dispute Resolution and eventually the judicial route such as the European small claims.

Users and consumers:

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.

Law 3/2014, of 27 March, modifying the Spanish general law for the defense of consumers and users.

 

8. ANTY MONEY LAUNDERING-

SEPLAC- Spanish bank of Spain public body for AML

 

Is Yes Finance subjected to SEPLAC standards?

Yes, as  Subject is considered persons or entities referred to in articles 2.1 and 2.5 of Law 10/2010, of April 28, regarding the prevention of money laundering and the financing of terrorism are considered as subject.

 

Likewise, they are understood to be subject to the obligations established in Law 10/2010, of April 28, the non-resident persons or entities that, through branches or agents or through the provision of services without permanent establishment, develop activities in Spain equal Nature to those of the persons or entities mentioned in the aforementioned articles.

 

When natural persons act as employees of a legal entity, or when they provide permanent or sporadic services, the obligations imposed by law will fall on the legal person in respect to the services rendered.

 

The obligated subjects are also subject to the obligations established in Law 10/2010, of April 28, regarding operations carried out through agents or other persons acting as mediators or intermediaries of those.

 

Money Laundering and Terrorist Financing Overview

Money laundering is the way in which criminal proceeds are ‘sanitised’ to disguise their illicit origins. Money laundering has various stages and characteristics; it can be used to support tax evasion, to disseminate the proceeds of fraud, or to handle any involvement with criminal activity or terrorist property. Money launderers may invest in financial products or purchase high value property in order to try and legitimise their illicitly gained funds.

Terrorist financing is the funding of those who seek to perpetrate terrorist activity, or their accomplices. Terrorist financing bears some similarities to money laundering, in that it needs to disguise the true origin and intended destination of funds, and larger terrorist organisations often need to move significant amounts within or between jurisdictions. However, terrorist financing can operate on a much smaller scale than money laundering, because individual terrorist acts may only require small amounts of funding. Another difference is that terrorism can be funded from legitimately sourced income such as charitable donations. Smaller value transactions and the potential for legitimate sources of funds increase the difficulty for financial institutions to identify terrorist financing activity.

 

 

• Process of identifying suspicious operations.
• Establish a customer identification process – “KYC Process” (Match list OFAC, See description below).
• Black list.
• Prevention of Money Laundering Training for staff.
• Coordinate the regulatory annual audit – SEPLAC-
• Configuration of the OCI – Internal Control Body. Drafting of Proceedings

 

1. Back-End (what you do and how you check the details provided by the customer) Onboarding checks

During the process of client onboarding (e.g. client registration) the following information will be provided by the client and the following checks should occur automatically (close to real time) to ensure you are performing sanctions and PEP scanning obligations and also for the purposes of managing online fraud risks: