Speech by Minister of Justice Henriksson at the Competition and Consumer Day, Finlandia Hall, 26 September 2019
Dear seminar guests,
It is great to see so many of you here at the European Competition and Consumer Day. My speech today will focus on consumer protection that the Ministry of Justice bears the main responsibility for here in Finland.
There are over five hundred million consumers in the European Union. As consumers, we often make our choices based on what is familiar and what feels safe. However, changes in our way of life and the way we consume have opened up completely new ways for us to be consumers. We now have almost endless possibilities to seek and find products and services that are suitable for us. Technology, and the opportunities it brings, makes it easier for us to make smart choices, as clear and timely information is more readily available than ever before. Blockchain technology, Big Data, MyData and artificial intelligence can all work for the benefit of consumers.
However, we also have a responsibility to ensure that such developments are in the best interests of consumers, and not to their detriment. Questions concerning corporate responsibility and ethics are essential. Both national and EU legislation aim to create favourable market conditions, but at the same time they also aim to protect the consumer. It is not always easy to strike a balance between the two. How can we ensure that consumers are genuinely making their own choices, and are not being inappropriately led to make certain choices? How can we know that customers are making choices on ethically sustainable grounds? Legislators must consider how rigorously these questions need to be addressed.
Improving the position of consumers is one of the priorities of the new Finnish Government, which began its work in the summer. As part of our efforts to draw the line between acceptable and unacceptable behaviour, we are currently in the process of examining ways of intervening in aggressive door-to-door selling and telesales. Vulnerable consumers such as elderly people are particularly affected by these kinds of unethical activities. We are also exploring how the powers of consumer protection authorities could be broadened.
I would also like to mention an ongoing legislative project that focuses on service contracts. The purpose of the project is to clarify what kind of rights the consumer has in cases where a service is delayed or defective. The services that this legislation would cover include health and medical services, service housing and other social services for the elderly, as well as educational services, for example. Services play an ever more significant role in society. That is why it is important to find more comprehensive and detailed ways to protect consumer rights in the service sector.
One of the benefits of digitalisation is that it enables things to happen much faster than before. However, this is not always a good thing from the consumer's perspective. A highly topical example of this are the so-called payday loans that have caused problems both in Finland and in many other EU countries. Interest rates still remain high and the economic risks for households are evident. In the beginning of September, a new act preventing credit interest rates from exceeding 20 per cent, with just a few exceptions, entered into force in Finland. We will closely monitor the effects of this new restriction. One of our current aims is also to curb aggressive marketing. This kind of ethically questionable marketing of payday loans, which emphasises quick access to money and the chance to make your dreams come true immediately, attracts many, but is full of risks.
A related concern is the mounting debt burden of households. At first, consumers were offered short-term, small-scale loans, which provided households with more flexibility in planning their finances. Since then, the amounts of credit being offered have increased significantly and the loan periods have become much longer. Reducing the debt burden of households and other problems related to it is, therefore, of special importance.
In today’s world, where digitalisation is advancing rapidly, it is also important not to forget the more vulnerable consumers such as elderly people. Digitalisation should not lead to exclusion. An important question is how we can protect the interests of those who are unable or unwilling to use digital service channels. The changes that digitalisation brings to the market environment create new challenges for us legislators as well. Our responsibility is to adjust to those changes. For example, the EU has managed to make rapid progress in updating relevant legislation related to the platform economy. Another example of a legislative project that is still under negotiation is the Directive on representative actions, which is part of the Commission's New Deal for Consumers. Finland will take an active role in ensuring that the Council will reach an agreement on this project in the coming months. We try to work for an effective yet balanced model, which builds on the present Injunctions Directive and on the national legislation on collective actions, and does not require tearing down the existing well-functioning structures.
A well-functioning and competitive market serves the interests of consumers. We, legislators, are responsible for safeguarding the functioning of the market and preventing and correcting unhealthy practices. A functioning market can only be achieved through consumer confidence. With these words I wish you an interesting seminar and encourage you all to actively participate in today's discussions. Thank you!