Law | KKV: Credit company Bondora broke the law by offering too expensive loans

The Finnish Competition and Consumer Authority According to (KKV), the credit company Bondora has broken the law by offering consumers more expensive loans than the law allows.

According to KKV, Bondora has not calculated the fees it collects for all its credit-related services as credit costs. The upper limit of credit costs is regulated by law, and according to KKV, Bondora’s pricing model exceeds the cost ceiling set by law.

In practice, Bondora has offered consumers three separate services, for which the company has not considered the fees charged to be credit costs. With the services, the consumer has been able to, among other things, make changes to the payment schedule of his credit and repay the credit prematurely.

According to KKV’s view, the costs of the services are directly caused by the credit relationship between the consumer and the company. For this reason, the payments should be counted as part of the credit costs, the release says.

Bondora has also collected a cost from its customers until November of the other year, which the company itself has designated as interest on the loan, says KKV.

However, according to KKV, it was not the interest on the loan as meant by the law, but an expense similar to other credit costs.

KKV’s interpretation is based on the fact that Bondora has charged interest throughout the credit relationship on the original credit capital and not on the remaining capital. According to KKV, Bondora has also violated the Credit Act with this procedure.

of KKV the announcement refers to the credit price regulation that entered into force in 2019. According to the law, a maximum of 20 percent annual interest can be charged on the loan, which is calculated from the unpaid capital at any given time.

In addition, the daily amount of other costs charged from the credit may not exceed 0.01 percent of the original credit amount or credit limit. However, the amount of other costs must not exceed 150 euros per year.

of KKV the announcement states that the consumer ombudsman is taking Bondora’s case to the market court. The representative demands that the Market Court prohibits Bondora from continuing its procedure, which KKV considers illegal, under the threat of a fine of 150,000 euros.

According to KKV, the legal actions are due to the fact that an agreement has not been reached with Bondora.

KKV already announced last June that it demanded corrections from Bondora for the company’s way of charging excessive costs for the loans it offers.