Are banks correct in refusing to open accounts for certain consumers? And what role do credit intermediaries play in many consumers taking large unsecured loans? These are two of the issues that Finansinspektionen (FI) will look more closely at in 2022 and that we present in this year's Consumer Protection Report.
Last year, FI received many complaints from consumers who were not allowed to open accounts at a bank or had their accounts closed. Banks are entitled to refuse to open accounts for consumers in some exceptional cases, but it is important that they always make an assessment on a case-by-case basis and not in general refuse to open accounts for groups of consumers.
We will therefore invite representatives from a number of banks and related industry organisations to review how to safeguard consumers' right to a payment account.
"Without a payment account, it becomes difficult to perform day-to-day activities. We have to avoid large groups of consumers being cut off from society without solid grounds," says Susanna Grufman, Deputy Director General at FI and responsible for consumer protection matters.
Consumer credit has increased rapidly in recent years, which has led to many people experiencing repayment problems. FI's analyses show that young adults and low-income households are particularly vulnerable.
Many credit intermediaries target consumers with offers to consolidate their loans to lower their monthly cost. Often, the credit intermediaries offer annuity loans, where the consumer pays the same amount every month over a long period of time. This means that the consumers, via the credit intermediary, often take on new loans that result in them paying more than if they had continued with their original loans. FI's mapping shows that, in 2020, almost 60 per cent of all unsecured loans at smaller banks were issued via a credit intermediary.
Credit intermediaries earn money on consumers both refinancing their loans and taking larger loans. This is not always in the best interest of the consumer. Therefore, together with the Swedish Consumer Agency, we will review the role of credit intermediaries in this development and the responsibility that is reasonable to place on these firms when it comes to considering the best interests of consumers.
"The role of credit intermediaries in the lending market is growing. It is therefore important to look more closely at this role and the responsibility they have to contributing to good consumer protection," says Susanna Grufman.
In this year's report, we also highlight the risk that commissions, including fund commissions, potentially influence the advice consumers receive and the options offered to them. We also point out that the government should change the rules for interest differential payments so mortgagors with a fixed interest rate are not adversely impacted if they want to repay their loans early.