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Consumer Ombudsman calls on banks in Sweden to compensate fraud victims

Consumer Ombudsman Cecilia Tisell urged all banks to start following the Supreme Court's decision and compensate victims of fraud.

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Every year, thousands of Swedes are cheated out of their savings. Photo by lilzidesigns / Unsplash

Tisell urged the banks to take action in a letter to their top management and boards, according to her article on DN Debatt.

This summer, a verdict from the Supreme Court clarified that those who have been tricked into handing over bank details to a fraudster have new opportunities to get money back through compensation from the bank.

After the verdict was passed, the Consumer Ombudsman asked banks to help the victims who had previously been refused their request to get money back, Tisell wrote in an article in Dagens Nyheter.

No response from banks

But there was no response from the banks, according to Tisell, who has now written a new letter to the banks’ top management and their boards.

In it, Tisell urged all banks to follow the Supreme Court’s instructions and reconsider the cases where they have previously let fraud victims bear the entire loss.

“There is no reasonableness in placing the financial responsibility, or the responsibility for preventing crime, on the customers’ shoulders,” Tisell noted.

Every year, thousands of Swedes are cheated out of their savings, and so far this year alone, over 17,000 known cases of fraud have been reported to the police, according to the Consumer Ombudsman.

In total, the cases involve sums of over 400 million kroner.

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MONEY

Why Swedish interest rates might not drop until autumn

The Swedish central bank on Thursday left the key interest rate unchanged at 3.75 percent, while adding that it might lower rates three times this year, rather than two as previously predicted.

Why Swedish interest rates might not drop until autumn

On the surface, it looks like the Riksbank should be cutting the so-called policy rate – inflation fell last month and is nearing the bank’s 2 percent target.

However, the bigger picture is more complicated.

Yes, inflation according to the CPIF measurement, which essentially means the effects of mortgage rates are removed, dropped to 2.3 percent last month, and since autumn, inflation figures have been lower than the Riksbank’s predictions.

However, inflation when considering CPIF with the effect of energy prices removed currently stands at 3 percent, which is higher than expected, and the Riksbank is wary of cutting the key interest rate by too much too soon.

It’s not all bad news. The bank indicated in a press statement that it could lower the policy rate by more than originally predicted this year, based on other economic indicators.

“Given that inflation is fundamentally developing favourably, economic activity is assessed to be somewhat weaker, and the krona exchange rate is a little stronger, the forecast for the policy rate has been adjusted down somewhat,” the bank wrote.

“If inflation prospects remain the same, the policy rate can be cut two or three times during the second half of the year.”

The next rate announcement will be on August 20th, and although the Riksbank has said there could be one more cut to the interest rate this year than previously expected, it hasn’t said whether this will occur in August or later on in the year. Rate decisions are scheduled for September 25th, November 7th and December 18th.

If the bank skips a rate cut in August, it looks relatively likely that it will cut rates in September instead.

There are some caveats, though. Factors like the inflation rate elsewhere, geopolitical unease, the krona’s exchange rate and the rate of recovery in the Swedish economy can all affect future policy rate changes, for better or worse.

Why is the policy rate important?

Well, it’s the bank’s main monetary policy tool. It decides which rates Swedish banks can deposit in and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages.

If bank interest rates are high, it’s expensive to borrow money, which means people spend less and as a result inflation drops.

Now that inflation is on the way down, the Riksbank can lessen the pressure on households by lowering the rate, but they don’t want to do that too fast in case consumption rises too fast, pushing up inflation again.

 

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