Mercado Pago faces lawsuit over alleged 1,300% annual interest rates

Mercado Libre and its digital wallet, Mercado Pago, are facing a legal challenge in Argentina regarding allegedly abusive interest rates. A lawsuit filed by attorney Diego Espasandín, founder of the Asociación de Consumidores Financieros de la República Argentina (ACFRA), claims that certain credit lines have applied annual interest rates exceeding 1,300%.

The legal action, currently before the National Commercial Court No. 24 in Buenos Aires, originated from two individual cases. In one instance, a user reportedly repaid 127,000 pesos on an 8,000 peso loan. ACFRA is seeking a class-action ruling that would cover approximately seven million users in Argentina, requesting an audit of the last three years of operations and the restitution of any funds collected improperly.

Mercado Pago has responded by stating that each loan is evaluated through its own risk system and that the highest costs apply primarily to low-amount credits for clients with limited credit history, representing only 2% of their loans. Meanwhile, social organizations have protested at Mercado Libre's offices, criticizing financial deregulation and the impact of high debt on vulnerable families.