The Regional State Administrative Offices and Finnish Consumer Ombudsman carried out at the end of 2018 a joint monitoring campaign in which they investigated whether domestic appliance and furniture companies provide the information required by the Consumer Protection Act when they offer credit as a form of payment. The results indicate that printed advertising of credit has reduced and the way that the information is presented has clearly improved.
Similar monitoring campaigns has been carried out since 1993. This time round, a total of 834 printed advertisements from domestic appliance and furniture companies were examined, with credit agents’ advertisements accounting for 107 of these. A total of 37 checks were made at business premises. Now for the first time it could be seen that credit is very rarely advertised in national, local and free newspapers. Advertisements were primarily either company image advertising or they mentioned that consumer credit is available, for example with the phrase “ask us about affordable credit options” or “we offer credit”, but the conditions for the consumer credit are hardly ever mentioned any more. For this reason there were hardly any advertisements with missing information.
The way that credit-related information was displayed was clearly better than in the results of the previous year. In those few advertisements which gave more details about the credit, the information was readable and generally all displayed in the same location. In the results from 2017, the information was sometimes divided up into different parts of the advertisement, so it was difficult to get an overall understanding of the cost of the credit.
Credit details must be given clearly and comprehensively
According to the Consumer Protection Act, if an advertisement for consumer credit mentions a specific detail about the credit, such as the percentage rate, then it must also explain clearly, visibly and concisely the other key information about the credit as well. In addition to the credit percentage rate, these include the actual annual percentage rate, the size of the credit or credit limit, the length of the credit agreement, the cash price of the good and any down payment required, the total size of the credit and credit fees, and the number of payment instalments. This information must correspond precisely with the credit company's standard terms of credit. It is illegal, for example, to place this required information in the advertisement using such a small font that it cannot be read without difficulty. Furthermore, all this information must be provided at the same time.
The Consumer Protection Act also requires that the lender and credit agent also provide the consumer with a Standard European Consumer Credit Information form well before the signing of the credit agreement. This includes details of the lender, the properties, fees and repayments for the credit being offered, and the good for which credit is being granted. The purpose of this form is to improve the comparability of credit offers, and for this reason it must be given to the consumer well before the signing of the agreement and not, for example, after the credit agreement has been approved.
During the monitoring campaign, the Regional State Administrative Offices gave instructions to credit agents, in situations where certain information was missing, regarding the statutory information that must be displayed. If this was not sufficient to correct the matter, the credit agent was issued with an oral or written warning. The Finnish Consumer Ombudsman would like to remind all businesses that both the funder and the retail business are responsible for ensuring that the advertisements comply with the law. The Ombudsman will continue to monitor advertising of consumer credit in cooperation with the Regional State Administrative Offices.