Parents involve hundreds of children in speed lending business in Estonia

Estonia’s biggest bank Swedbank made a shocking discovery recently – the bank accounts of nearly 1,300 minors had been used for taking and/or repaying a speed loan, LETA/Postimees writes.

Nearly 600 of these accounts belonged to children who were younger than 13 years.

Using speed loans that have huge interest rates is one of the most painful social problems in Estonia since thousands of families suffer because of obligations that exceed their means and are often taken without thinking of consequences.

Swedbank reached its discovery by holding a lottery for kids who often pay with their “School card” bank card, meant for 6-12 year old kids. When drawing lots for winners, bank employees noticed that accounts of several minors were connected to a speed loan. The bank then analysed accounts of all minors. “A sad fact emerged that there were 1,290 such accounts,” said the bank’s communications manager Kristi Roost.

The speed loans or SMS loans were not taken by kids since speed lending companies are not allowed to lend to minors. Parents can use children’s bank accounts and cards though and parents who have taken too big loans and whose bank account use is thus restricted at the demand of creditors, do it…..

Read the whole story: http://www.baltic-course.com/eng/finances/?doc=86904&ins_print

Source: The Baltic Course