The consumer, according to the court, should also be given ample time to become familiar with the terms of the loan.
There are several loan companies in Finland that offer small, short-term, high-interest loans, typically between 50 and 300 euros. Some companies also offer loans that reach into the tens of thousands of euros.
Prior to this legal intervention, anyone over the age of 18 could apply – and likely be approved any time of day - for quick, small loans with a single SMS message.
Problems sometimes arise when the loans, and the hefty interest sums attached to them, need to be paid back.
The Consumer Office sued quick-loan company Atlas-Invest in court in order to create a precedent for loan companies' practices.
According to the Market Court’s decision, a company merely displaying its loan terms and interest figures on the Internet is not adequate for the protection of consumers.
At a minimum, the court stated, the terms of the loan must be sent directly to the applicant via email.
The Market Court also approved the Consumer Office’s stipulation that loan companies can no longer advertise that loans are granted in only a few minutes.
If a cash-strapped customer applies for a loan at night, for example, money cannot be transferred before 7 a.m. the following day, the court said.
Quick loan laws tightened
Government has also approved a draft of a proposed law that would tighten guidelines concerning quick loans. Soon it will be illegal to grant loans during the night.
According to the draft legislation, loan companies will also be required to clearly disclose annual interest rates and fees to the consumer. Measures enhancing the identity of the loan applicant will also be heightened.
Applicants seeking quick loans will soon be required to prove their identities with the help of, for example, net bank code verification.