EU finance ministers have been urged to take action against Finnish company Ferratum which is offering high interest loans via SMS text messages and the Internet.
Dutch politicians have called on the country's finance minister Wouter Bos to take action against Ferratum, which has launched the controversial loan service in the Netherlands.
Customers can borrow between EUR100 and EUR300 for a term of 15 days by texting their name, date of birth, bank account and address to Ferratum. New customers will recevie the funds within 24 hours. For pre-registered users, the loan is tranferred to bank accounts within 10 minutes.
But politicians have voiced concerns about the exorbitant 25% processing fee and interest rates that the outfit charges customers. Research by Nibud (the National Institute for Household Budget Advice) suggests that interest rates charged by Ferratum equate to a 600% APR.