Trapped by SMS loan debt
Just send a text message, wait 15 minutes and you have $500 on your bank account; the simplicity of obtaining SMS loans in Sweden is increasingly luring youths into debt.
Since 2006, the number of un-repaid sms loans has soared: in 2007, Kronofogden was tasked with collecting debts from 20 000 loans, 36 % of which were granted to people aged 18 to 25.
Instant sms loans prone to fraud
Consumer Agency and Ombudsman of Finland: says the system of granting instant loans via mobile phone and a sms message or the Internet is highly prone to fraud.
A test done by the newspaper Keskisuomalainen reports that, 7 out of 8 sms loan companies granted instant sms loans even though the money did not end up in the phone owner’s account. In some cases, the loans were granted in a matter of minutes.
Instant loans are easy ways to get a little extra cash, usually up to a couple hundred euros, by ordering them via text message. The Consumer Agency says it’s far too easy to use someone else’s phone to deposit money in any bank account, leaving the handset owner to pay the bill.
In many cases, all that’s needed to order a loan is a little information about the owner of the mobile phone, including his or her social security number.
Instant loan companies in Finland that grant instant loans say that abuses are fairly rare.
Sms loans are quite synonymous with micro loans and fast loans. The concept of sms loans comes from Finland and have spread to the other Nordic countries.