Goodbye instant messenger – welcome for fairer loan terms!

A new Consumer Protection Act entered into force in Finland on September 1, 2019, which regulates interest rates on loans more closely than before.

As a result of the change in law, many of the companies that provided quick leases ceased operations and some moved to offer better terms. Now, in September 2019, the instant nipple is history and the farm has fairer loan terms.

Preparation of a law regulating instant nipples


Preparations for the law, which entered into force in September, began as early as spring 2018. Initially, companies that issued instant nipples and debt collection companies strongly opposed the change. According to a study by YLE, the draft law received dozens of statements, about half of which opposed tightening the rules.

Initially, the bill proposed to extend the then 50% APR limit to all consumer loans. You see, the law at that time only applied to loans or consumer loans with less than $ 2,000.

Later, however, the bill changed its shape and later in 2018 it was proposed to include a 30% cap on consumer interest. Already at this stage, the proposal also included limiting other consumer charges to EUR 150. By limiting costs, the government sought to simplify regulatory compliance and facilitate regulatory oversight of the sector.

For the consumer, moving away from the real interest rate cap was certainly a welcome innovation. The formula for calculating the annual percentage rate of charge is complex and does not give a very clear indication of the magnitude of the costs actually paid, especially in the case of short-term loans.

Last Minute Turn in February 2019

Last Minute Turn in February 2019

In February 2019, members of the government and opposition sitting in committee unanimously called for a 20% cut in the interest rate cap on quick leashes.

The committee’s proposal was 10 percentage points below what the interest rate ceiling was expected to fall last fall. In this context, the committee also asked the Board of Directors to investigate whether the oversight of instant nipples could be centralized to the Financial Supervisory Authority.

Marketing of express lounges in summer 2019

Marketing of express lounges in summer 2019

In the summer of 2019, the Finnish media was packed full of instant ads. Many companies are more active in marketing instant nips than in the long run – with the goal of attracting as many new customers as possible.

The new legislation does not address existing express or credit agreements but continues to comply with the law in force at the time the agreement is concluded.

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