Additional benefits tied to credit tend to compromise the consumer's chances of making deliberate and well thought out decisions. At the same time, they increase the risk of excess debt.
In a recent television advert, OP-Keskus urged its bonus customers to pay for all their purchases on credit, as this would help them accrue bonus points. The advertisement directed viewers to a website which stated that since you're making purchases anyway, you might as well pay for them by Visa. Bonuses would not accrue for purchases paid in cash or by debit card.
Credit is not a routine everyday purchase. It has a long-term effect on one's finances. As such, consumers must be given the time to make credit decisions without being distracted by inappropriate persuasive messages.
According to the Consumer Agency, it is irresponsible to e.g. artificially try to make credit more attractive by linking it with various benefits and compensation schemes. Such additional benefits may soften up the consumer in such a way as to make them forget the need to carefully consider the necessity of credit or their ability to pay back the loan.
Most recently, the Agency raised this issue in conjunction with the preparatory work for the Payment Services Act. In its statement, it emphasised the fact that a seller may not offer discounts that are restricted to those customers paying by credit.
Paying for a carton of milk by credit card?
Favouring credit customers is also inappropriate as part of customer loyalty programs. Customers may not be urged to pay by credit by offering credit customers superior customer loyalty benefits compared to cash customers. In practice, this would reward loyal customers for taking on debt. This is contrary to prevailing social objectives.
The Consumer Agency notified OP-Keskus that by urging customers to pay for even the most common purchases by credit instead of cash, it promoted indebtedness. Compared to using cash, making purchases on credit tends to make people spend money without noticing it.
The advertisement also failed to mention the fact that while paying by credit might have resulted in more bonuses accrued, it would also entail additional costs in the form of interest and annual fees.
The Agency informed OP-Keskus that its marketing was contrary to the marketing provisions contained in the Consumer Protection Act. The company agreed to change its marketing according to legal requirements.