New rules for the 2019 payroll loan for banks and financial institutions
New rules for the payroll loan in 2019
Since the payroll loan was officially created in 2005 there have been numerous changes in the rules for granting and to adapt the modality to market changes and to protect the retirees and pensioners of the INSS.
- Settlement rules to adjust marketing policies
- Settlement rules to limit credit actions in the segment
- Rules not appropriated to adjust commissions of bank correspondents
- Payroll rules to protect against fraud and undue solicitation of loans
- Settlement rules to prevent harassment of insureds and beneficiaries
Anyway, whenever it is necessary, the government agency that regulates the INSS loan , the MPS – Ministry of Social Security, National Social Security Institute (INSS) and DataPrev , which is the company that carries out the consignment operations intermediated between the beneficiary and the financial institutions.
Consigned to new benefits and pensions
It is well known by all that banks, financiers, fintechs, loan companies and bank correspondents have access to the information of the beneficiaries and insured in some way.
– In general, the new INSS retiree and pensioner receives paycheck bids even before the first payment of the benefit is released.
Under the new rules, institutions will be prohibited from harassing new beneficiaries to offer payroll deductible loans . The minimum period for granting payroll deduction will be six months after receipt of the first benefit.
It is common for newly retirees to be harassed by banks and financiers who offer discounted credit.
To protect the retiree and pensioner from irregular hiring, the benefit or pension will be blocked for release of proposals in the first three months.
After that, the INSS insured must present himself to a bank branch of his or her choice and request the release from the body.
According to the instructive regulations, the insured party who is interested in making payable loans must request a pre-authorization to have unrestricted access to the credit modality.
The system will work in the simplest and most uncomplicated way possible, but with complete safety.
The process can be done by the electronic channel on the Internet made available by the bank or financial institution. For this, the retiree, pensioner, or legal representative must provide the necessary information and data.
What are the rules for combating payroll fraud?
The changes also include an updated, more robust and secure system, the goal is to make the INSS have the possibility of combating fraud in the consignment more effectively.
It is worth mentioning that there are many consigned loans granted without the insured’s authorization, according to the reports that come to the Ombudsman’s Office itself.
“Loans, if carried out within the term of fence (180 days), will be considered commercial harassment, and will be punished and may even have the contracts of consignees terminated.”
When will the new payroll rules begin to count?
The rules begin to apply as of April 2019. After this date:
- The institutions will have to wait 6 months to offer payroll loans to new retirees and pensioners
- In addition, the INSS benefit will be blocked for borrowing in the first three months
Paycheck credit is an excellent opportunity to borrow money but this facility of picking up cash from pocket installments can become a major financial problem since loans are granted in the long term up to 72 installments.
About the INSS payroll loan
In Brazil, the average receipt with monthly payments of INSS pensions and pensions, receive only a minimum wage.
Most intriguing is that more than 6 million beneficiaries are still in the labor market so they can pay their monthly bills and keep the family in dignity.
Faced with this almost predatory scenario, financial institutions of all kinds take advantage to make money by offering money at low cost but bring huge fortunes to profits.
The consigned loan can help at some point, yes of course it can, however, the financing of financial resources in banks and financial need to be paid back. This puts the retirees and pensioners in a situation of indebtedness.
Today, those who earn a minimum wage of R $ 954 can commit up to 30% of this amount with the paycheck loan and another 5% with the paycheck credit card.
Leakage of data and information in the INSS for consignment
It is not today that we talk about fraud and data leaks in operations and transactions that evolve the payroll deductible credit of the INSS .
In order to have a vague idea, only in 2018, more than 97,000 complaints were officially registered related to the insistence of banks, financiers and institutions harassing the insured.
When they get in touch, loan companies, fintechs and bank correspondents already know what retirement value will be given to the beneficiary before he even knows the amount – it seems magical, but it is not!
The data leak has not yet been proven, but everyone knows that there is illegal trade in information. There is also no evidence of fraud against the DataPrev and INSS system , or if the Authority has robust protection against hackers and information thieves.
The INSS denies that there is data theft or the disclosure of any data related to the new retirements and pensions. However, citizens who feel bad about being harassed can make their complaint to the INSS free of charge.
Simply access the service desk of the institution that offered the consigned loan or the Procon consumer protection bodies etc.
The rules begin to be valid 90 days after publication in the Official Gazette of the Union. Institutions that fail to comply will be notified and, if they are not appropriate, the contracts may be terminated.
What changes with the new rules of the payroll loan 2019?
Prohibition of new loans: With the new rules against harassment of the INSS, banks and financial institutions will be prohibited from contacting to offer new beneficiaries (retirees and pensioners) paycheck credit in the first six months after receipt of the first benefit – retirement or pension.
Benefit blockage: In order to avoid fraud in the INSS and the harassment made by financial institutions and banking institutions, new retirees and pensioners will be hired for payroll deduction in the first 3 months after the first receipt released by the system.
Authorization by the insured: The consigned loan can only be granted after the initial period of 3 months, after which the insured can go to the bank branch and request the release of the benefit.
Interest rates of the loan: With no news when the interest rate, banks continue to be required to disclose monthly what interest are applied per payroll loan operation.
Undue discount : If any irregularity is detected related to the breaking of the new rules, the insured should make a complaint to the Ombudsman General of Social Security to block the discounts.
Beginning of the new rules: The changes with the new payroll rules were published on December 31, 2018, but will only become effective as of April 1, 2019.
Conclusion regarding changes
The evolution of the payroll loan is made practically every year, this time the main change is really the deadline for private and public institutions and banks not to offer credit to the new INSS retirees and pensioners , however, we know that the approach is somewhat invasive and sometimes aggressive.
Surely the banks and financiers will do a parallel work of disclosure in that period of 180 days, after the deadline, surely institutions will pester with insistent connections the new retirees and pensioners.
The marketing and approach are extreme to try to sell the consignment in the payroll of the INSS for being a very lucrative financial product for the banks.
Despite the new rules of the paycheck loan for 2019 created to eliminate harassment of the insured or INSS benefits, loans despite having interest below the market, yet do end up compromising the income of retirees and pensioners making the debt become a true unstoppable snowball.