Mercado Libre’s Founder Faces a Criminal Usury Complaint Over Loans Costing Up to 1,375% a Year

Argentina · Fintech

The headline figure is the total cost of credit, not the interest rate. It sits on the company’s own public rate sheet.

A criminal complaint filed in Buenos Aires accuses Marcos Galperin, Mercado Libre’s founder and chief executive, of usury over the cost of consumer loans sold through the company’s Mercado Pago wallet. It is a complaint, not a charge, and nothing has been proven. What makes it awkward is that the Mercado Pago loan rates it cites are the ones the company publishes itself.

The published total annual cost of the consumer line runs from 76.36% to 1,375.94%. (Photo: Internet Reproduction)

Why the two numbers are so far apart

Nothing here has been tested. A complaint is an allegation, a prosecutor still has to decide whether to investigate, and no finding has been made against anyone. What is not in dispute is the arithmetic, because both sides are working from the same published table.

The nominal annual rate — the TNA in Argentina — is the headline interest. The total financial cost, the CFT, is what you actually pay once fees, taxes and the effect of compounding on monthly instalments are added. Argentine law requires lenders to publish both.

Mercado Pago’s table gives a TNA of 48% at the bottom and 249% at the top. Compounded, those become effective annual rates of 60.12% and 863.48%. Add everything else and the total cost runs from 76.36% to 1,375.94% a year. At the top of the range the two numbers differ by more than five times; at the bottom, by about 1.6.

The company also publishes separate credit-card figures: 84.11% nominal and 165.76% total cost on the compensatory rate.

What MercadoLibre does. MercadoLibre, Inc. operates online commerce platforms in Brazil, Mexico, Argentina, and internationally. The company operates Mercado Libre Marketplace, an online commerce platform that can be accessed through mobile app or website; and Mercado Pago, a financial technology solution platform, which offers comprehensive set of financial technology services to users and other users…

What the complaint argues, and what the company says back

Article 175 bis makes it a crime to exploit a person’s need, rashness or inexperience so as to have them give or promise interest or other pecuniary advantages evidently disproportionate to what they receive. The test turns on disproportion and vulnerability, not on breaching a cap: Argentina sets no ceiling on personal-loan rates. The only relevant cap covers credit cards issued by non-bank entities, which the central bank fixes monthly.

Solano’s case is comparative. He claims the same company’s Brazilian credit costs about 63% a year, making the Argentine product roughly twenty-one times more expensive, and he calls the gap between the two ‘absolute disproportion’. We could not independently verify that Brazilian figure — Mercado Pago’s own Brazilian materials cite a market average of 8.4% to 8.6% a month for unsecured personal loans, which compounds to far more than 63%.

He also contrasts lending rates with what the wallet pays. Money held in Mercado Pago earns a variable yield through a money-market fund, around 17.5% to 18.6% a year in mid-August.

Mercado Pago has not addressed the complaint directly, but it has defended the pricing. It told Infobae and La Nación on 14 August that the rate is set by individual risk profile and improves as a user builds a history and demonstrates good repayment behaviour, that it is ‘very competitive’ with traditional banks for low-risk borrowers, and that its arrears ratio is in line with the country’s main private banks. Asked about a protest outside its headquarters on 18 August, the company declined to comment.

Why this matters if you live in the region

Mercado Libre is the largest e-commerce company in Latin America and one of its largest fintech operators, and Mercado Pago is a default wallet for millions of people in Argentina, Brazil and Mexico. Credit offered inside a wallet you already use, at the moment of checkout, reaches people who would never walk into a lending office.

Argentine inflation makes every rate in the country look enormous, and it is the obvious defence. It is a better explanation for the level than for the spread — the distance between what the wallet pays savers and what it charges its most expensive borrowers is the part the complaint is built on.

The practical takeaway for anyone borrowing in Argentina is narrow and useful. Ignore the TNA. The CFT is what you will actually pay, lenders are required to show it, and in this market the two can differ by more than fivefold.

Frequently Asked Questions

Sources: Mercado Pago — published rates; Partido Obrero — Solano files a criminal complaint against G; Infobae — why the wallet charges up to 1,375%; La Nación — the cost of borrowing in a digital wallet; Argentine Penal Code, Article 175 bis