Latvia to regulate installment and deferred payment services

New regulations regarding installment services and “buy now, pay later” schemes will take effect in Latvia on November 20. These changes, driven by the implementation of EU Directive 2023/2225, aim to expand consumer protection by treating deferred payment services under broader consumer credit regulations.

Under the new rules, service providers must assess a consumer's ability to meet their financial obligations before entering into installment agreements. This applies to services such as purchasing mobile phones, computers, or routers on installment plans. While the Ministry of Economics noted that these services are often interest-free and distinct from traditional high-interest “fast loans,” they are now classified as “deferred payment services.”

To balance accessibility with regulation, the Ministry proposed simplified assessment procedures for small-scale deferred payments, potentially allowing for credit scoring instead of full income and expenditure analysis. This is intended to ensure citizens maintain access to essential digital tools. Large companies offering these services remotely will also face new registration requirements with the Consumer Rights Protection Centre. Exceptions to the stricter requirements apply if the full amount is paid within 50 days of delivery, or within 14 days for certain remote contracts.