The Finnish Competition and Consumer Authority has just made a decision that could affect the lives of thousands and thousands of Finns.
New terms and conditions for consumer credit
The terms of consumer credit are changing. In its decision, the CCA (ie the Consumer and Competition Authority) stated that banks cannot charge fees and commissions on consumer credit “for reasons of cost increase or for other legitimate reasons”, as many of them have done so far.
If you have read the credit terms carefully (as you always would!), You may have found that term in your consumer credit agreement.
What exactly was the problem with the standard terms?
This has been the so-called standard cooperation that many banks operating in Finland have done in the Federation of Finnish Financial Services in order to establish common general conditions for consumer credit. One of these so-called “model terms” has been the condition that allows the bank to increase its consumer credit fees and charges due to higher costs or other legitimate reasons.
According to Good Lender, such general conditions are unacceptable as they reduce competition and restrict the consumer’s freedom of choice. Each bank should decide independently on the content of its loan terms. According to Good Lender, this condition has been transferred to the consumer the business risk inherent in, Good Finance, higher price levels and increased costs.
New terms for loans
As a result of the SME decision, the banks have committed to dismantle the system and replace the model terms with new terms. The new condition restrictions the right of banks to change the fees and charges of existing consumer credit agreements, as the new condition only allows changes in fees and charges:
- A government decision or order
- For reasons of legislative change
In addition, the increases cannot exceed the costs actually incurred by the banks.
These new terms will enter into force on existing consumer credit agreements as well as on new consumer credit agreements over the next three years.
Want to find the best loan for yourself? You can easily compare Consumer Loans in our Consumer Credit Comparison: