The competition and consumer watchdog FCCA handed down a decision on Monday that would limit the right of banks in Finland to hike charges and fees on consumer loans.
The authority said that the decision means that in future banks may only increase fees on the basis of a ruling by authorities or changes to existing legislation.
In addition the authority said that any future fee rises cannot exceed the actual costs faced by the institutions.
Previously consumer credit agreements allowed banks to increase fees and charges on loans on the basis of the banks’ increased costs or for any other reason they saw fit.
According to the FCCA, implementation of this provision -- which was jointly drawn up by the banks -- violates competition law because it amounts to harmonised competitive behaviour.
Banks have now given the authority a commitment that they will no longer apply that particular clause. The agency said that giving up the practice in favour of the limitation also better serves existing consumer protection legislation.
The FCCA said that the limitation will be applied to existing consumer loans and all new consumer loan agreements drawn up in the next three years.