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How Swedish payday loan companies are putting 68.738 people in debts

Monday, 29 April 2013
In three years, Sweden's ten largest payday loan companies have put 68,738 people in debts. A new media review shows that up to six borrowers cannot repay their loans. Now bailiff requires that the industry put its cards on the table.

The Swedish daily, Dagens Nyheter reports that the number of unpaid payday loans has increased dramatically in recent years, from 2011 to 2012, the number of cases rose by 62 percent.

The trend is so alarming such that the bailiffs are trying to identify what proportion of loan companies' credit goes to recovery.
"We want to get an overall picture of how common it is for these types of loans to lead to debt, it is important to know if there is a major social problem," said Jan Åkerlund on Swedish Enforcement agency, Kronofogden.

So far, the companies have refused to provide the information needed for the requested examination. The authorities want to know how common it is for a debt to go into collection.

The paper says data sows a mapping trend in which in three years, the ten largest companies in the sector attracted 68,738 people into the debt collection sector for unpaid loans. Most unpaid loans market is controlled by the company Folkia, which in three years has made 14,440 requests for payment.

Folkia had sales of Skr 90 million in 2011, the same year they sent recovery claim for unpaid loans to the Enforcement for Skr16,6 million.

Also on the seven top-ten list of companies with highest number of recoveries is Metrobloggen Sweden AB which between 2010 and 2011 made 4,500 applications. But in 2012 reduced the number to 47. Metrobloggen, Sweden AB is so far the only company that transparently how many loans they give out annually. According to CEO Richard Gabler, they granted 30,000 loans in 2012. Lending was about Skr100 million.

A number of companies in the sector want to form a trade association. The aim is that the industry as a whole should give figures on debt and the number of loans dished out.
by Team

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