Uncertainty Surrounds Moderation Requirements for Credit Marketing in Sweden
Regulatory Uncertainty Leaves Industry Players in the Dark
STOCKHOLM, SWEDEN - As Swedish authorities continue to grapple with the concept of moderation in credit marketing, industry players are left wondering what this requirement entails and how it will be applied in practice.
SFSA’s Assessment Criteria
The Swedish Financial Supervisory Authority (SFSA) has been paying closer attention to moderation requirements recently. A comprehensive assessment of all relevant circumstances will be made, considering whether the credit is presented in a way that misleads consumers about financial consequences or leads them to make an unfounded decision to enter into a credit agreement.
Key Guidelines
- Marketing should be neutral and factual
- Avoid intrusive tactics such as targeting specific consumer groups via digital means
- Balance must be struck by not disproportionately highlighting certain terms of the credit, thereby reducing consumers’ ability to make informed decisions
Despite these guidelines, it remains unclear how moderation will be applied in practice, leaving many industry players uncertain about what is required to comply with regulatory expectations.
Other Regulatory Developments in Sweden
No Restrictions on Trading Loans in Secondary Market
Sweden does not have any specific restrictions on trading loans in the secondary market. However, fintech companies providing alternative finance solutions may still need to comply with relevant regulations, including those related to consumer protection and anti-money laundering.
Proposed Regulation for Crowdfunding
A proposed regulation aimed at crowdfunding has yet to be adopted into law. The proposal seeks to establish a licensing regime for businesses involved in share-based and loan-based crowdfunding, as well as reward-based and donation-based crowdfunding platforms. Companies that receive authorization will be referred to as licensed capital mediators.
PSD2 Implementation
Sweden has implemented the Second Payment Services Directive (PSD2) into its national law, regulating payment services such as money remittance, execution of payment transactions, acquisition of payment instruments, payment initiation, and account information services. The directive aims to promote competition by requiring financial institutions to make customer or product data available to third parties.
IDA Implementation
Fintech companies selling or marketing insurance products in Sweden must comply with the Swedish Insurance Distribution Act (IDA), which implements the EU’s Insurance Distribution Directive (IDD). The IDA regulates insurance distribution, including restrictions on third-party remunerations and requirements for providing advice on a fair and personal analysis.
Credit Information Services Regulation
Sweden also has regulations in place governing credit references and credit information services. A licence from the Swedish Data Protection Authority is required when carrying out credit-rating operations in Sweden.
Date of Accuracy
This article was accurate as of July 10, 2020.