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Record payment defaults in 2019

Last year a small group of consumers registered a total of 1.8 million new payment defaults.

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Image: Henrietta Hassinen / Yle

Payment defaults in Finland reached a record high in 2019, with a total of 1.8 million new past-due bills registered. According to credit-trackers Asiakastieto, last year’s payment defaults were 20 percent higher than in the previous year.

By the end of the year, the number of consumers with poor credit was nearly 387,000 – almost 5,000 more than in 2018.

According to the credit rating agency, there was at least a glimmer of hope – namely a small decline in the number of overdue payments among the under-30 age group.

"The same people owe money to different creditors, so as the problem snowballs several defaults come quickly," Asiakastieto business director Jouni Muhonen said in a press release.

Hunt for strategies to curb over-indebtedness

The age group struggling most with debt includes men aged 35—39, of whom 15.9 percent are registered as having payment defaults in the Asiakastieto database.

Authorities have been looking for measures to rein in Finland’s debt habit. Last autumn an interest rate ceiling on consumer credit was introduced, placing even tighter restrictions on the fees charged by payday loan firms. However the effect of the reform was not yet visible in the number of past-due bills recorded.

At the beginning of October a finance ministry working group proposed slowing household indebtedness by introducing a debt-to-annual income ratio, among other measures.

A so-called positive credit register would allow creditors to see in real time a potential borrower’s outstanding debt as well as income information. This would allow lenders to better assess a debtor’s ability to service a loan before it is granted. The aim is to have the positive credit register online in 2023.

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