Advertising, Estonia, Financial Services, Legislation, Loan

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Estonian Ministry wants to prohibit speed lending ads

BC, Tallinn, 19.05.2014.Print version
Estonian economy and infrastructure minister Urve Palo sent a draft law to other institutions for a round of opinions, which would prohibit advertising credit services targeted at private individuals in radio, television and on the Internet, and severely restrict advertising content of all consumer loans, LETA/Postimees Online reports.

"Consumer credit advertising by entrepreneurs so far has created in society an attitude, like taking a speed loan would help solve everyday household problems and enhance the quality of life. In reality, however, things are often the contrary," said Palo. "The changes that the draft law plans, do not solve people's financial problems, but they are a clear sign that the state cares about them."

 

According to the draft law, advertising credit offered to consumers (i.e. specifically lending money) will be prohibited in television, radio and on the Internet. Advertising will remain allowed on the website of the loan service provider as well as in print and outdoor media, but with restrictions.

 

The draft law also restricts contents of advertising of consumer credit, hire purchase, leasing, mortgage and consumer loans, and the advertising can in the future contain only information permitted by law, such as the provider's name and license number and business contact information, credit cost rate example, an invitation to examine the financial conditions etc.

 

There were 34,706 persons as of January 30, 2014 in Estonia who had payment problems because of loans issued by speed lending or consumer credit companies. Swedbank's analysis estimates that there are more than one hundred thousand speed lending clients in Estonia.






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