Many are the means developed by fast
loan providers to make extra money on those late with payments – for instance,
creating a debt collecting company of their own. A bill now in pipeline is
trying to set a ceiling to debt proceeding costs. One way for firms to earn
extra income on clients owing them money is asking for huge collection fee and
sending loads of paid letters and notices, explained justice ministry private
law expert Kristina Koll.
Another option is to keep sending the
letters and sending the claim debt collectors while lender and borrower are
debating essential issues – a task for the courts – or the parties have already
agreed about payment of the debt. If loan provider and debt collector have the
same owner, loans may be granted to people unlikely to ever pay. That means
they can already count on collection fees as they sign the loan contract, said
Ms Koll. It is rather widespread for SMS-loan companies to run a parallel debt
collecting firm. This is the very business of Estonian fast loan providers.
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