Don't worry, we speak : Español (Spanish), too!

5 fintechs accused of taking advantage of elderly and poor in Argentina

Don't worry, we speak : Español (Spanish), too!

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Contxto – Ohhhh, somebody is in trouble. Actually lots of somebodies. 

This week the Argentine government announced legal action is being taken against a group of fintechs. Their names: Smart Cash, Punto Click, Patagonia Cred, Efectivo Urgente, and Wenance. And the accusations are big: misuse of information, excessive fees, and fraud.

The majority of the users who reported they were affected by these fintechs were retirees and beneficiaries of a social security program known as Universal Allocation per Child (AUH, for its acronym in Spanish). 

The AUH is a subsidy for the unemployed, those working an informal job, or people who earn less than the minimum wage and have underage or disabled children to take care of.

So basically segments of Argentina’s more vulnerable population: the elderly and the poor. 

Sheesh, this paints an ugly picture already both for the accused startups and compliant fintechs.

Fintechs, you stand accused

“There were multiple incidents,” said Paula Español, the country’s Minister of Domestic Commerce. 

“Various automatic debit charges were made against users who’d never accepted a credit line. Or, they were promised a loan and were charged administrative fees. In addition, [customer] agreements were changed. All within a framework that charged users an interest rate for up to 1,500 percent.”

Regulations in Argentina forbid businesses that offer loans from charging users that credit line through a debit account.

Still, to add more fuel to the fire, some users said they were approached by fintechs who falsely stated they had government approval.

Users filed their claims under the National Chamber of Appeals for Criminal and Correctional Cases. Another government body, the Sub-Secretariat for Action in Defense of Consumers, carried out the investigation and found evidence of massive fraud and non-compliance. 

One of the accused fintechs, Wenance, states it has been complying with the letter of the law.

Undoubtedly, this legal drama is sure to continue.


It’s these signs of misconduct that make governments so severe when it comes to startups.

Wanna hear more? We recommend you listen to the following podcast episode: ¿Es momento de una ley fintech en Argentina?. You can find the time stamp available in the description.

Related articles: Tech and startups from Argentina!


Mariana López
My topic darlings are startup management, edtech, and all-things pop culture. J Balvin is Latin America's best reggaetonero and I dare you to convince me otherwise.


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