QUICK SMS LOANS - Finland has been using these new forms of credit for a while and forthcoming regulation may not meet expectations of the consumer advocates. Are these a new European equivalent to payday loans? Is this a Finnish phenomenon or do we know about similar loans in other countries? In Finland the Parliament is (hopefully) going to accept a law to prevent SMS loans to be paid out at night time. But no interest ceiling so that the interest can be even over 1000 % p.a. Read the abstract and article below THE USE OF SMALL INSTANT LOANS AMONG YOUNG ADULTS – A GATEWAY TO A CONSUMER INSOLVENCY?(IJCS_789 407..415) The aim of this paper is to study 18- to 29-year-old Finnish consumers’ use of instant small loans (i.e. SMS loan) and other consumer credit services that have increased notably in the past few years. We examine what kind of expenditures instant credit is used for and focus also on young consumers’ financial situation and their perceptions of themselves as money handlers. The research method is quantitative, and data are derived from an open online survey (n = 1610). Our results reveal that consumer credit is used by young people in all income brackets and employment positions. However, there is a clear connection between certain life-course stages (young, single parent), financial positions (low income), employment situations (marginal) and the propensity to take instant loans and consumer credit. The young people who take an instant loan once are likely to do it again. Typical purposes of use included buying alcohol, cigarettes and partying. For some consumers, the use of small loans is part of controlled and economical use of money. However, particularly in the low-income brackets, it is also common to buy food and to repay credit or interest. Young people, who use instant loans recognize flaws in their money management and see themselves as ‘wasteful’ consumers more often than those who do not use instant loans. On the basis of this empirical study, it is unquestioned that young people’s consumer education needs to be strengthened. In Finland, this need has already been recognized in both consumer policy and teacher education. ID: 43103 Author(s): iff Publication date: 16/06/09     SMS Loans in Finland (Int. Journal of Consumer Studies 2009) (205948 Bytes)

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Created: 17/06/09. Last changed: 17/06/09.
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