12 October 2020
The Consumer Ombudsman has negotiated with the instant credit company Euro24 Finance Oy and the debt collection company Gothia Oy on compensating consumers for excessive credit costs. The companies have now announced that they will accept the compensation claims of the Consumer Ombudsman.
Last autumn, the Consumer Ombudsman stated that she was considering filing a class action on the EUR 2,000 account credits issued by Euro24 Finance between 20 May 2016 and 20 May 2019 with excessive credit costs. Negotiations with the instant credit company Euro24 and the debt collection company Gothia are about to close as the companies stated that they would pay the compensation required by the Consumer Ombudsman. The Consumer Ombudsman will review the companies’ proposals and monitor their implementation. If the companies carry out the compensation as they have promised, the matter will not proceed to court in regards to these contracts.
In these cases, the question was not only about the unreasonably excessive amount of the credit costs but also the failure to comply with the requirements of the law in concluding the credit agreements. In this case, the consequence is the cancellation of all credit costs.
The companies contested the grounds for the Consumer Ombudsman's claims; nevertheless, they stated that they would compensate for the credit costs for more than 150 persons who took out credit and who came forward for the class action in October and November last year. According to the companies, consumers will receive a total of 336,000 euros in refunds. In addition, the credit costs that have not been charged bring great benefits to consumers, who only pay the capital they borrowed. The companies will inform consumers about the compensation by letter.
"We are satisfied with the outcome. Many consumers will now be fully compensated for their excessive credit costs retroactively. The aim of the class action was also to seek a preliminary ruling based on principle, which would have an impact on the entire instant credit sector but now consumers will be compensated immediately and to the same extent that the class action would have required,“ explains Consumer Ombudsman Katri Väänänen.
Making every effort to reduce the cost of instant credit
The Consumer Ombudsman wishes to intervene in the excessive credit costs of instant credit by any means possible. One of the methods is class action even though the process is hard for both the plaintiff and the defendant. The companies stated that they would compensate consumers for the credit costs while the Consumer Ombudsman was submitting an application for a summons to the District Court.
"Companies want to avoid being subject to class action as much as they can. In this case, too, the companies eventually decided that they would prefer to directly pay the required sums rather than be brought to trial, which is likely to take a very long time, is expensive and apparently not good for the company's reputation,” says Väänänen.
During the negotiations, the companies have continued to bring overdue loans to court for enforcement. The Consumer Ombudsman has assisted consumers in the District Court who came forward for the class action last autumn. Many consumers have been compensated for their credit costs in this manner. The compensation to be paid now applies to those whose case has not yet been decided by the court.
The Consumer Ombudsman has also considered filing a class action against J.W.-Yhtiöt's Suomilimiitti credit. Last autumn, more than 1,500 consumers came forward in advance or requested the assistance of the Consumer Ombudsman who had taken out either Euro24 or J.W.-Yhtiöt credit of EUR 2,000 between 2016–2019. The majority of those who had come forward in advance had taken out the J.W.-Yhtiöt Suomilimiitti credit. Negotiations with J.W.-Yhtiöt are still ongoing.
What to do if you have Euro24 credit
If you have taken an account credit of EUR 2,000 from Euro24 and come forward in advance for the class action last autumn, wait for a letter from Euro24 and/or Gothia. Check the letter to make sure that the refund or remaining amount is correct. Use e.g. your bank statements to determine whether the calculation of company withdrawals and payments correspond to your withdrawals and payments. You are only required to pay back the capital you borrowed.
At the same time, Euro24 terminates the credit contract. If you owe money, the company has promised a non-interest payment period of two months for the outstanding capital. However, the company may not require the payback of the whole credit agreement in one instalment if the repayment period stated on the original contract has not expired yet and the companies do not have any other grounds for requiring payment in one instalment under the Consumer Protection Act.
If you have Euro24 credit but have not come forward for the class action, you can claim excessive credit costs from Euro24 or Gothia if the claim has been transferred to Gothia. If the claim is unsuccessful, the matter can be referred to the Finnish Consumer Disputes Board if the credit is not collected by a court.
Further information on the subject: