Blunders occasionally happen in doing business. The costs incurred from them should be borne by the company in question, but sometimes the customer ends up having to pay for mistakes or problems in interpreting legal provisions. The Consumer Agency has intervened in the actions of two businesses offering quick loans.
A consumer's application for quick credit was rejected by Netford Capital due to the fact that the mailing address he provided did not match the register information used by the company. The applicant had, however, reported his address to the population register, which the credit company indicated as their source of information. The blunder was caused by the company using outdated register data. Rejection of the credit application was due to the company's own error, but the customer had to pay for the text message sent to apply for the loan. The company paid the customer appropriate compensation for his costs after being contacted by the Consumer Agency.
Double punishment for delayed payment
Another consumer had a previous case of late repayment of a quick loan from Tammirahoitus Oy. He was appropriately charged penalty interest and a fee for a payment reminder at the time. The company also closed his client account. Later, when the consumer applied for a new loan from the same company, the company notified him that due to the previous instance of late payment, they would charge him ten euros for opening the client account and four euros for checking his credit history.
In the view of the Consumer Agency, checking an applicant's credit history is part of normal financial business operations and, therefore, the costs arising from it must be included in business expenses rather than charged to the customer separately. Business expenses are deducted from earnings. Opening a client account is also a normal business operation, the costs of which should be included in general business expenses.
The case involved a one-time credit agreement, which can be characterised as one of the most typical types of agreements. Hence, the consequences of late payment should be linked to the loan agreement which involved the instance of late payment. The client account, on the other hand, is linked to the new loan agreement. If a fee is charged for opening a client account due to neglect in repaying a previous loan, the fee collection is linked to the late payment of the previous loan. A penalty is thereby imposed on the consumer not only in the form of statutory consequences of late payment, but also in the form of a collateral sanction based on delayed payment of a previous loan. The practice was found to be in breach of consumer law as well as the provisions of the Interest Act and the Debt Collection Act. The company agreed not to collect charges for opening a client account. KUV/1951/41/2008, KUV/8099/42/2007