Over-Indebtedness in the Finnish Consumer Society

Raijas, Anu; Lehtinen, Anna-Riitta; Leskinen, Johanna

doi:10.1007/s10603-010-9131-8

Cited by 28 publications

(21 citation statements)

References 4 publications

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“…The options for obtaining consumer credit and instant loans have also expanded in that time. These loans typically attract young people who have fewer options for acquiring regular loans from the banks because they lack assets and income at this age (Autio et al., ; Raijas, Lehtinen, and Leskinen, ). Like most of Europe, Finland was also hit by the economic recession after 2008, but overall, the observation period of this study in the 2000s could be described as a relatively stable period, and there were no major increases in the number of individuals facing severe financial problems.…”

Section: Debt Enforcement In Finlandmentioning

confidence: 99%

Debt Problems and Crime*

2016

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The few existing studies on the association between debt problems and crime have suggested that the two are correlated, but the causal nature and direction of this association has been unclear. By using longitudinal register data (N = 20,696) from Finland on young adults' debt default and crime, we examine the potentially reciprocal association between debt problems and crime with both cross-sectional and longitudinal models. Debt problems and crime have a strong association in the data, which persists after controlling for several measures of socioeconomic status. The longitudinal analyses using fixed-effects regression models show that levels of crime are higher during periods of debt enforcement, ruling out stable between-person heterogeneity as the sole cause. The final analysis examining the exact timing of new debt defaults and crime shows signs of a mutually reinforcing association; the rate of newly enforced debt increases in the months preceding the first crime leading to a conviction and continues to increase afterward mostly because of criminal monetary sanctions left unpaid. The conclusion of the analysis is that debt problems have a dynamic association with criminal offending. We discuss the difficult barrier that unpaid debts pose to offenders seeking to desist from criminal activity in the current Finnish context.

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Section: Debt Enforcement In Finlandmentioning

confidence: 99%

Debt Problems and Crime*

2016

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“…Inability to predict what can happen to a person's life has been proposed as a major explanation for financial problems (Raijas, Lehtinen, & Leskinen, 2010). When one has lower perceived risk, s/he is less likely to take protective actions (Brewer, Weinstein, Cuite, & Herrington, 2004), which would prevent her/him from becoming indebted.…”

Section: Perceived Risk and Propensity For Indebtednessmentioning

confidence: 99%

Hope, perceived financial risk and propensity for indebtedness

Barros¹,

Botelho

2012

BAR, Braz. Adm. Rev.

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“…Moreover, credit cards are seldom issued to those on an irregular income or with a temporary job. Studies have shown (e.g., Castellani and DeVaney 2001;Raijas et al 2010) that those experiencing financial difficulties tend to take on additional unsecured credit or to buy on hire purchase, which temporarily eases the financial situation, at least on the surface. In practice, it merely aggravates the debt problem.…”

Section: Recent Developments Related To Payment-default Noticesmentioning

confidence: 99%

“…Banks have traditionally been rigorous in ensuring the customer's ability to pay and evaluating their own risks in terms of providing loans, but the advent of financialization has dramatically increased the number of companies offering unsecured credit. Consuming via debt has become generally acceptable and easy, but on the other hand, the abundance of credit systems and payment methods could easily lead an over-optimistic consumer into debt (Raijas et al 2010). Indeed, debt problems are affecting a growing number of households trying to manage everyday life burdened with increasingly many debt relationships (Hiilamo 2018;Sullivan et al 2000;Trumbull 2012;Valkama and Muttilainen 2008).…”

Section: Introductionmentioning

confidence: 99%

Debt Judgments as a Reflection of Consumption-Related Debt Problems

2019

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In connection with the strengthening and enlargement of financial markets, i.e., financialization, financial services and products play a major role in the everyday lives of consumers. One drawback of this trend is the increase in the number of debt problems. The data used in this article consist of Finnish district-court judgments related to debt that in most cases was consumption-related, and register-based data on debtors. We first compare debtors to the entire population of Finland by age, gender, marital status, and education, and also in different age groups. The focus then turns to the four most common types of debt in the judgments (based on consumer credit, operator services, distance selling, and credit card debts), and how age, gender, marital status, and education related to these debt types. According to the results, consumers under 30 years of age, in particular, men, those with a basic level of education, and the divorced were over-represented in the data, compared to the overall Finnish population. Young single adults were particularly likely to have accrued smaller amounts of debt related to instant loans and operator services, whereas more extensive consumer credit as well as credit card debt tended to be a problem among retirees. Credit card debt, as well as debts to lending firms, were more common among those with tertiary education than among those with a basic education. Overall, the adverse effects of financialization focused especially on young people with a low level of education. The results also indicate that legislation could partly reduce the negative effects of financialization.

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Over-Indebtedness in the Finnish Consumer Society

Abstract: Consumption, Credit use, Financial capability, Finland, Over-indebtedness,

Cited by 28 publications

References 4 publications

Debt Problems and Crime*

Debt Problems and Crime*

Hope, perceived financial risk and propensity for indebtedness

Debt Judgments as a Reflection of Consumption-Related Debt Problems

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