Instant credit class action: The Consumer Ombudsman’s negotiations with J.W.-Yhtiöt and WestStar ended with the payment of compensation

The Finnish Consumer Ombudsman has negotiated with the instant credit company J.W.-Yhtiöt and the debt collection company WestStar on compensating consumers for the credit costs of Suomilimiitti running account credits. The companies have announced that they agree to the compensation claims of the Consumer Ombudsman, thereby making the bringing of the matter before a court in the form of a class action unnecessary. The total amount of the compensations is more than EUR 1 million, and the Consumer Ombudsman will monitor their payment.

In autumn 2019, the Consumer Ombudsman stated that they would consider filing a class action against J.W.-Yhtiöt for EUR 2,000 running account credits which, in the Consumer Ombudsman’s view, have unreasonable credit costs. The credits were granted between 4 July 2016 and 31 August 2019. In addition, 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 negotiation phase preceding the filing of a class action led to the companies undertaking to pay the compensations to the extent required by the Consumer Ombudsman, thereby rendering a class action unnecessary at this time.

The compensations will be paid to 588 persons who came forward for the class action in October and November 2019. Consumers will receive a total of EUR 1.1 million in refunds. In addition, the credit costs of 122 people whose outstanding debt consists of a portion of the principal will be cancelled, with the people in question only having to repay the outstanding portion of the principal. The companies will be in touch with those consumers whom the compensation concerns. The Consumer Ombudsman will monitor the payment of compensations.

J.W.-Yhtiöt contested the grounds for the Consumer Ombudsman’s claims but decided to pay the required compensations in order to avoid a class action and the related expensive and long-lasting court proceedings. J.W.-Yhtiöt considered their terms and conditions to be clear and understandable, and the terms and conditions were in the company’s view neither unreasonable nor invalid. J.W.-Yhtiöt considered that, in the drafting of credit agreements, they had acted in all respects as required by law.

“We are very pleased with the negotiated settlement. Consumers will receive compensation to the same extent as we required, but without a long-lasting legal process,” says Consumer Ombudsman Katri Väänänen.

While the negotiations were in progress, the companies have continued to collect overdue Suomilimiitti running account credits in courts. The Consumer Ombudsman has assisted consumers in district courts who came forward for the class action in autumn 2019. The compensation to be paid on the basis of the negotiated settlement applies to those whose case has not yet been brought before a court.

Do this if you have a credit from J.W.-Yhtiöt

If you have taken out a Suomilimiitti running account credit of EUR 2,000 granted by J.W.-Yhtiöt and have come forward for the class action in autumn 2019, please wait for contact from J.W.-Yhtiöt and/or WestStar. You will receive a secure email link in your email to provide your account number for your refund. Refunds will be paid within two months after you submit your account number. If you do not reply to the message you received, a letter will then be sent to you, and finally the companies will try to call you by phone. If no refunds can be made, the companies will deposit the funds with the Regional State Administrative Agency of the refund recipient’s domicile.

Check the message that you receive to make sure that the refund to be paid to you or the outstanding amount of the debt 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 principal you borrowed.

At the same time, J.W.-Yhtiöt will cancel the credit agreement. If you still owe money to J.W.-Yhtiöt, you will be given a two-month interest-free payment period for the outstanding principal that is due. The company may not require the payback of a credit agreement in one instalment if your payback period under the original credit agreement has not yet expired. In such a case, the payback period under the original credit agreement is to be followed.

If you have a credit from J.W.-Yhtiöt but have not come forward for the class action, you can claim excessive credit costs from J.W.-Yhtiöt or WestStar if the claim has been transferred to WestStar. The matter can be referred to the Finnish Consumer Disputes Board if your complaint is unsuccessful and the credit is not being collected in court.

For more information, please call +358 29 505 3053 on weekdays between 10:00 and 12:00 until 7 May 2021.

Group action was also considered for instant loans from another company

The Consumer Ombudsman also considered filing a class action for Euro24 Finance’s EUR 2,000 running account credits, but the negotiations ended last October with compensations being paid. In this case, refunds were paid to more than 150 consumers who had taken out credit.

The group action is intended to be used as a last resort in cases where no settlement can be found through negotiation. Over the years, the Consumer Ombudsman has reached a number of negotiated settlements, thereby making bringing a class action before a court unnecessary.

“Companies clearly want to avoid being subjected to class action suits to the last. In many cases, the preventive effect of group action has worked as the lawmaker seems to have originally thought,” says Consumer Ombudsman Väänänen.

Further information on the subject: