Prohibitions reinforced with a penalty payment imposed on an instant loan company, a debt collection agency, a law firm and an accountable person in the companies

On application filed by the Consumer Ombudsman, the Market Court imposed prohibitions on 17 January 2020 on an instant loan company Suomen Rahoitusyhtiö Oy, a debt collection agency Rq Tieto Oy and a law firm Hasa Bros. Oy, as well as on an accountable person who had had a position in the companies. To underscore the prohibitions, the Market Court imposed a penalty payment of EUR 100,000.

On application filed by the Consumer Ombudsman, the Market Court will evaluate in the case the practices applied by the defendants to their lending and the collection of outstanding debts between 2014 and 2015. Credits were offered under a variety of names on different websites. Consumers who had participated in the credit plans offered by Suomen Rahoitusyhtiö were charged, among other things, guarantee premiums and mobile service fees without justification. Such premiums and fees were charged by PIPA Business Oy, a company affiliated with Suomen Rahoitusyhtiö. Unjustified receivables were also collected by Rq Tieto, a collection agency, and Hasa Bros, a law firm, both companies being affiliated with Suomen Rahoitusyhtiö.

The Consumer Ombudsman assisted consumers in court

PIPA Business, registered in Seychelles, sued consumers for failure to pay unjustified fees that the company had requested them to pay. The Consumer Ombudsman assisted several consumers in district courts between 2014 and 2016, with PIPA Business’s claims for damages being dismissed in all cases.

However, Suomen Rahoitusyhtiö and its affiliated companies continued their unlawful practices, such as collecting unjustified receivables and putting pressure on consumers in order to obtain payments. In collection letters, consumers were threatened with payment default entries being registered in their name, bringing the case to the district court and with significant additional costs.

In 2016, the Consumer Ombudsman took the case to the Market Court to have prohibitions issued

Credit granting and the collection of receivables via Suomen Rahoitusyhtiö was decentralized to a number of domestic companies and for example companies registered in Panama and Seychelles. According to the defendants, the granting of credit involved peer-to-peer lending to which the Consumer Protection Act did not apply. According to the Consumer Ombudsman, the arrangement was intended to circumvent the provisions of the Consumer Protection Act.

In its ruling of 17 January 2020, the Market Court stated that the Suomen Rahoitusyhtiö had in practice acquired full powers to represent the lenders in all matters relating to the debt relationship. The procedure was not genuinely peer-to-peer lending and was therefore covered by Chapter 7 on consumer credits of the Consumer Protection Act. The Market Court prohibited the company from using a clause in the contract that excludes its actions from the scope of the Consumer Protection Act.

According to the Market Court, Suomen Rahoitusyhtiö unlawfully charged the consumer unjustified costs related to the credit relationship. The Market Court also ruled that Rq Tieto, a debt collection company, and Hasa Bros had acted in breach of the Debt Collection Act and good collection practice, as the companies must have been aware that their collecting of receivables was unjustified.

In addition, the Market Court found that there was a specific reason for imposing a personal ban on a person involved in the companies in question on account of the fact that this person had acted in breach of the Debt Collection Act and good collection practice. The person had been in a decision-making position in both Rq Tieto and Hasa Bros, and had been handling collection mandates in both companies. In addition, the person had played a key role in many other companies related to the case.

As of this writing, the Market Court has not published its ruling on its website.

Press release 8 January 2016: Consumer Ombudsman applies to Market Court for injunction on three companies