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Finansinspektionen is concerned about the debts of the Swedes
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Credit
It’s easier than ever to buy first, then pay.
But for those left behind, the consequences can be devastating.
Finansinspektionen is now raising the alarm that credit and installment purchases are increasing at a very rapid rate.
– Even small loans can create big problems, says CEO Erik Thedéen.
The strings on the lid are designed in different ways, but they all have the same meaning.
“Buy first, pay later,” Klarna urges.
“Buy one month, pay another,” yells competitor Qliro.
Less stress and growing queues? Prepare your purchase via mobile and receive information about the credit immediately ”, is expressed in an offer from Resurs Bank.
It’s easy to be tempted to take the item home immediately and postpone payment in the future. For those with orders in the mail basket and margins in the economy, these purchases often mean no problems. But recently, there have been a series of alarms that credit purchases are throwing more and more people into a vicious spiral of interest costs, bill fees and money that is never enough.
“Consumer loans increase during the pandemic,” writes Statistics Sweden in a press release where the authority also states that the total amount of the loan has increased from 181 to 260 billion in the last five years.
“Never before has the Prosecutor received so many claims for unpaid debts,” announces the agency that it can take the home of a person in debt if all other possibilities have been exhausted.
Photo: Vilhelm Stokstad / TT
“It’s a cry for help”
According to the executing officer, the number of new cases so far has not increased at the high rate that many fear. However, the authority is concerned about the influx of debtors between 18 and 25 years old. More young people are also applying for debt relief. However, they often do not meet the established requirements.
– Many young people do not understand what debt relief means. They Google solutions to their financial problems and find our website, says Per-Olof Lindh, unit manager for the Swedish Law Enforcement Agency, in a comment.
– It’s a clear cry for help.
Finansinspektionen is also concerned about development.
“Quick and easily accessible credit presents the risk of consumers borrowing more than they can afford,” the authority wrote in the latest consumer protection report.
“Many young people are at risk of going into debt early in life, which can limit their freedom of action later on.”
Photo: Magnus Hjalmarson Neideman / SvD / TT
Erik Thedéen, Managing Director of Finansinspektionen.
CEO Erik Thedéen spoke clearly when the survey was released a few weeks ago:
– We see an explosive increase in invoice, credit or installment purchases. We think e-commerce is driving this to a great extent.
According to Finansinspektionen, around ten percent of invoiced purchases give rise to a debt on which the customer must pay interest. Five percent of them end up with debt collection companies.
– Here we have an embryo for something that could be a pretty big consumer protection problem.
Criticized by the Swedish Consumer Agency
On July 1, 2020, a law came into force that means that online stores may not have credit alternatives by default. The Swedish Consumer Agency has accused Klarna of violating regulations at checkout on the site of clothing giant H&M.
Jan Bertoft, general secretary of the Swedish Consumers interest group, believes that Klarna is not the only one highlighting the possibility of paying later.
– Merchants and companies providing payment solutions do their best to split the payment. The reason is that they make money from it, he says.
– I want to see stricter regulations in this area. Credit is not just any commodity. Debt can lead to lifelong misery.
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