Recently, the Swedish Consumer Agency began examining two major players in the fast-loan industry to see if they are hard enough in their credit tests, according to Serena Deng. The reason for this is that the players, Save4Finance and Lendright Credit Group, have sent on many cases to enforcement authority. In 2017, Save4Finance applied for 2,200 payment orders corresponding to USD 44.7 million and Lendright Credit Group 3,700 cases corresponding to USD 37 million. So of course we can understand that the Consumer Agency put these companies under control.

 

The credit tests must be reviewed

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The Swedish Consumer Agency has already requested to obtain a lot of information from these two fast-loan companies, mainly the basis for their credit tests. It is only when these documents are reviewed that the Swedish Consumer Agency can decide whether to warn one or both of these credit companies. Should that happen, they will also have to pay a high penalty, but if they appeal the decision, probably 1-2 years of court proceedings will start. This has happened before.

 

Do they really grant more sms than others?

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But is it really the case that Save4Finance and Lendright Credit Group are more easy-going with their credit tests than other fast-loan companies? Of course, we do not know that, but we can look at our own statistics to get a hint if it seems right. We can see how many of those who visited our lenders through us who actually got a loan, at least they give a certain picture of what the situation looks like.

When it comes to Save4Finance’s two brands Credit Vibes and Borrow Right, the degree of grant seems to be quite different. It is true that Credit Vibes is among the top three of those who grant the most sms loans, but Borrow Right does not. About 20 sms lenders granted more loans than Borrow Right did in 2017 and that is almost half of all sms lenders you will find with us.

With regard to Lendright Credit Group, it does not seem at all true that they would be too sloppy with their credit tests compared to other sms companies. Of course, this statically is not 100% reliable as it may happen that more people apply for a loan with, for example, Short loans than with other lenders when they come from us, but it is not very likely.

So why are there so many cases at enforcement authority from just Save4Finance and Lendright Credit Group? It is difficult to say, but it is very possible that they will send cases to enforcement authority faster than other fast loan providers do when their customers have payment difficulties. It was one of the reasons that Save4Finance was excluded from SKEF (read more about it below). The fact that so many debts have ended up at enforcement authority does not simply have to be due to the fact that these companies are more lax than others when they do their credit checks, even if it can be. It remains to be seen.

 

Have been in windy weather before

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Both Save4Finance and Lendright Credit Group have been in windy weather before. In 2014, SKEF ruled out Save4Finance for using a business model that did not work in line with SKEF’s guidelines. And the same year, the Consumer Agency decided that Granlend AB (which is now the Lendright Credit Group) would be prohibited from continuing with its business.

The reason the Consumer Agency wanted to stop Granlend was because they felt that Granlend’s credit tests had shortcomings, something that the Consumer Agency now wants to look at again. As you may understand, Granvik was never banned because they still exist, though under a different name. Namely, the administrative court ran over the Consumer Agency’s demand for a ban in 2016, however, Granlend received a warning and was fined USD 300,000 because the court considered that Granlend did indeed make his compulsory credit checks but that they were not good enough. In addition, the problems had been corrected since the Swedish Consumer Agency wanted to stop them.

Well, it’s not just credit lenders of fast loans and sms loans that are just scrutinized. At about the same time that Granlend got its verdict, our dear H&M also got a fine of USD 6,000,000 for defective credit tests.

Now it’s just to wait and see if the Swedish Consumer Agency finds something they can turn down this time too, which they probably will because they often place quite high demands on what a credit check should look like, especially with regard to sms loans. And then it remains to be seen if the credit companies will appeal, which is also very likely.

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