Mercado Libre faces usury complaint over high interest rates in Argentina

Former legislator Gabriel Solano has filed a legal complaint against Mercado Libre, alleging usury through its fintech arm, Mercado Pago. The complaint cites Article 175 bis of the Penal Code, accusing the company of taking advantage of individuals' financial needs by charging disproportionate interest rates.

According to the complaint, the Total Effective Annual Financial Cost in Argentina can exceed 1,375%. This stands in stark contrast to the company’s operations in Brazil, where the annual effective financial cost is approximately 63.13%. This indicates that users in Argentina pay more than 21 times the rate charged to Brazilian users for similar credit.

Solano noted that while Mercado Pago offers loans with fewer requirements than traditional banks, the costs are significantly higher than those of institutions like Banco Nación, which offers rates as low as 12% to 14% for refinancing. Financial reports indicate that Mercado Libre’s financial services business now accounts for 64.3% of its total revenue in Argentina, nearly doubling its e-commerce earnings.