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The Swedish FI challenges financial market companies with very risky saving accounts - Such accounts could be banned

Thursday, 02 May 2013

The Swedish financial supervisory authority, FI wants to ban savings accounts with high risk. Many savers are attracted to these accounts by its promised high interest rates, but the risk of them losing all their savings in these accounts is too big.

Saver would obviously be attracted to saving accounts that has an interest repayment of ten per cent or within such region. It has shown that many of such accounts carry information such as "security", "safe savings", "guaranteed growth" which are all flashed but "the exemptions" are removed. The warnings for loosing all their savings or the risk information on such accounts hare not included in the advertisement information.

The maximum amount for these savings accounts usually range up to Skr50,000. But there is a catch, they are not covered by the deposit guarantee. Small investors thus risk losing all their savings if the companies becoming insolvent. This is where the Swedish FI gets very critical of the company running that saving model.

"We think that this exception in banking regulations, which opens for such deposit business, should be removed," says Per Håkansson, of the Swedish FI to Swedish television news

"We have written to the government, and asked for change in the law in this area. We believe that consumers are exposed to too much risk. A risk that is mighty and difficult for consumers to grasp," says Per Håkansson.

The Swedish FI is not the only authority that has criticized such deposit accounts run by financial companies outside the banks. The Swedish Consumer Agency also has problems with how savings accounts are marketed in Sweden.

The Authority has dealt with cases against several companies where such saving have been carried out in these deposit accounts. Maria Johansson is a lawyer at the Swedish  Consumer Agency.

"We have seen that most companies highlights the benefits of the accounts, but do not similarly informed depositors about the risk that they are not covered by deposit insurance. As the law makes it clear that the information should be given in a clear manner, this means that in the same place where information on the account's principal properties is provided so should there be this information in its entirety," says Maria Johansson at the Swedish Consumer Agency to Swedish television.

Recently we also reported that Nordea, the biggest bank within the Nordic area sold financial products that were worth less and buyers of such securities were not protected should the companies went bankrupt.

By Team

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