EASY CREDIT – Notification of any incidence of non-payment to Credit Registers in Finland is seen as unfair and premature under existing security shortfalls. INSTANT CREDIT SHOULD NOT INCREASE YOUNG PEOPLE'S BAD CREDIT RECORDS The Finnish Consumer Agency's correspondence with companies offering instant loans continues. New companies are constantly entering the field and need to be guided. Most recently the Consumer Agency drew attention to some new companies' practice of reserving the possibility to obtain a bad credit record for a customer in their terms. Some new providers of instant loans have said in their contract terms that they will report any customer who does not repay a loan within 60 days of the due date to the credit information register. The Consumer Agency considers such a term unfair in the present situation and demands that it be removed from contracts. Instant loan companies' systems are not reliable enough at present to allow them to apply a contract term allowing bad credit records. As we pointed out in issue 4/2006 of this newsletter, there have been large gaps in system security. Consumers have managed to take out an instant loan with a text message in another person's name by using this person's mobile phone and ID number, for example. Against this background it would be unfair for a company to shirk its own responsibility for the consequences of system risks and even increase the possibility that customers would receive bad credit records without justification. It is worth point out that companies that have operated in the field for a longer time do not use corresponding terms. RESPONSIBLE DEBT COLLECTION If a customer fails to repay a loan, there are obviously consequences. These should not be unfair, however, but should be in proportion to the customer's overall situation. The Consumer Agency emphasizes to lenders that they must stop collection measures if a consumer reports that he has not ordered a loan. It is also unfair to demand that a consumer report a crime to the police before collection measures are stopped. Companies must remember that they are responsible for gaps regarding risks and abuses in the system and their consequences. The Consumer Agency also reminds lenders that the main target and user group for their product, young people, are often in a weaker position than the average customer. Young people's financial skills are not always sufficient for them to take out a loan only after careful deliberation and a thorough comparison. On the contrary, the biggest attraction of an instant loan is that it can be obtained quickly and easily. POSSIBILITY OF A BAD CREDIT RECORD SHOULD BE MENTIONED IN MARKETING The Consumer Agency is prepared to re-evaluate the use of a contract term allowing a bad credit record. There is no point returning to the matter until great progress has been made in system security, however. The Consumer Agency has hoped that the Finnish Bankers' Association would encourage banks to look for new ways to ensure that the person ordering a loan and the person owning an account are the same. Companies offering instant loans could also approach the association in this matter. If a company had reliable means to ensure that the person ordering a loan and the person owning an account are the same and if it operated in a proper and responsible manner, it could include a term allowing a bad credit record in its contract. In this case information regarding this term and its consequences should be provided in any advertising for instant loans. Simply mentioning the matter in contract terms is not enough, since a consumer applying for an instant loan is hardly likely to read contract terms carefully. (from Kuluttajavirasto, the Finnish Consumer Ombudsman: Newsletter, Current Issues on Consumer Law 7/2006) ID: 38651 Autor(en): iff Erscheinungsdatum: 02.10.06     URL(s): Finnish Consumer Ombudsman's Newsletter 7/2006 Suggested reform of CCD Consumer Policy: Programme proposal 2007-2013

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Erzeugt: 05.10.06. Letzte Änderung: 05.10.06.
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