Latvijas Hipotēka has operated in the consumer lending and so-called reverse mortgage industries for several years. Several clients have lost valuable properties due to comparatively small debts as a result of their operations, it was reported.
"In evaluating several years of consumer complaints regarding reverse mortgage services, we’ve decided that the type of service provided by Latvijas Hipotēka is not fair to the consumer, and we’ve deemed it an unfair business practice," said PTAC Director Baiba Vītoliņa.
The Baltic Center for Investigative Journalism (Re:Baltica) investigations reveal that the company had been conducting these unfair business practices for years with little reaction from the responsible authorities. PTAC said that they were unable to immediately determine a violation as the service offered was complex.
"There’s been quite enough time for the responsible authorities to act. There have really been a great amount of complaints over several years to PTAC, the police, and the courts,” said Re:Baltica Journalist Liene Barisa-Sermule.
“If even one of these authorities had reacted immediately with at least an information campaign, maybe many people wouldn’t have lost their properties or overpaid," said Barisa-Sermule.
Latvijas Hipotēka is a non-bank creditor with an image and name that might lead some people to assume a connection with the previously state-owned Mortgage and Land Bank or "Hipotēku un zemes banka", which has now been renamed as the Latvian Development Finance Institution Altum and is not a player in the retail banking or loan sector.
Latvijas Hipotēka Owners Edgars Tālums and Ņikita Gončars declined to comment on the situation before even hearing the questions Re:Baltica had for them.
Meanwhile several people still have legal proceedings ahead of them, while others have permanently lost their property. PTAC issued a warning on November 12 urging consumers to make sure credit issuers are licenced, and to immediately report any suspicious business practices.
PTAC maintains a list of credit companies which can be accessed on their website (and includes Latvijas Hipoteka).
Re:Baltica's full investigation is available (in Latvian) at their website.
LTV's report can be watched below.