The finance company Blue Finance Suomi Oy has offered consumers loans at unlawfully high costs, by not including separate fees that it has levied among credit costs that are subject to price regulation. The Consumer Ombudsman is now demanding that the Market Court of Finland order Blue Finance Suomi to cease the procedure on pain of a fine of €100,000.
Blue Finance Suomi has raised the prices of the loans that it offers by charging separate fees for paper invoicing, expedited processing of credit applications, and for so-called pikanostopalvelu (‘rapid withdrawal service’) and hetinostopalvelu (‘immediate withdrawal service’). The Consumer Ombudsman regards these as parts of the credit relationship, and fees charged for them as credit costs, whose maximum levels are set in legislation. Blue Finance Suomi’s pricing model has resulted in the company breaching the legislative credit cost cap. According to the company, the separate fees that it charges are not part of the credit costs, and consequently, price regulation does not apply to them.
The Consumer Ombudsman has previously investigated violations of regulation with the parent company Blue Finance Oy, which transferred its consumer business operations to its subsidiary Blue Finance Suomi in March 2021. No agreement was reached in negotiations held in the autumn of 2021, and the Consumer Ombudsman is now seeking a ruling from the Market Court.
“Credit costs may not be increased by disguising basic components of the credit relationship as ancillary services on which an additional fee could be imposed. Problems constantly occur in following the credit price regulation and we have investigated several credit companies regarding the issue. This case proceeding to the Market Court will hopefully encourage others to act in accordance with the law, too.”
Price regulation sets maximum level for credit costs
According to the credit cost regulation, which took effect in September 2019, annual interest charged on the unpaid principal of a credit must not exceed 20 per cent. In addition, the daily amount of other credit costs must not exceed 0.01 per cent of the principal of the original credit or credit limit. Also, the yearly amount of the said other credit costs must never exceed €150.
All costs that are known to the lender and that stem from the credit relationship are included in the credit costs. For example, fees for applying for credit or making a drawdown as well as charges for sending payment details to the consumer are credit costs regardless of the amount of time and the method used to accomplish the action. Only completely optional ancillary services may be excluded from the credit costs. In such a situation, the credit must be offered under the same conditions, regardless of whether the consumer enters into an agreement for an ancillary service in connection with the credit agreement.