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FINANCE

Denmark cracks down on ‘greedy’ payday loans

A broad parliamentary majority agreed on Thursday the terms of a bill which will tighten Denmark’s regulatory grip on payday loans.

Denmark cracks down on 'greedy' payday loans
Photo: Kristian Djurhuus/Ritzau Scanpix

The government along with its left wing parliamentary allies support the agreement, as do opposition parties Liberal, the Danish People’s Party and Ny Borgelige and the unaligned Alternative party.

The agreement aims to clamp down on payday loans which have left a significant number of younger Danes in debt, according to a press statement released on Thursday by the Ministry of Industry, Business and Financial Affairs.

Under the new rules, limits will be set on the maximum annual cost of a consumer loan as well as on the maximum interest and fees payable on loans.

Additionally, commercials and other advertising of pay day loans will be more tightly regulated.

“I am very proud that we are now, for the first time, doing something about the pay day loans which have trapped many, particularly young and underprivileged people, in unmanageable debt,” business minister Simon Kollerup said in the press statement.

“It was high time. We have formed an agreement which protects Danish consumers. This agreement means that our regulation of this area is among the tightest in the EU,” Kollerup added.

Specifically, the new rules will ban all loans with an APR of more than 35 percent. Under current rules, loans with APRs as high as 800 percent exist on the market.

Companies offering loans with APRs higher than 25 percent will be banned from marketing them, meanwhile.

“Companies who behave decently towards their customers can look forward to a relatively easy transition to the new rules, while a number of those who have been the most greedy will have to change their business models. I am happy that parliament is in support of this plan,” Kollerup said.

The agreement also provides funding for counselling for people who find themselves in economic difficulty as a result of the loans, and increased lessons on managing personal economy will be given in schools.

READ ALSO: Can you really get paid for borrowing money in Denmark?

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MONEY

Four websites and apps for buying and selling second hand in Denmark

What's the best place to pick up vintage clothes, a coffee table or a bicycle at a bargain second-hand price online in Denmark? Here are four options.

Four websites and apps for buying and selling second hand in Denmark

With no Danish edition of eBay, there’s not a single platform which dominates the market when it comes to finding second-hand items or selling on things to a new home.

The four apps and websites listed below can all be used to buy second-hand items and list your own for sale. Some might be more suited for specific purposes or types of item than others.

Reshopper

If you’re looking for a baby jogger, jumpsuit (flyvedragt) or Peppa Pig toys, this is probably your best option. The Reshopper app includes listings by a good number of private sellers and can be sorted by location, meaning it’s often possible to find what you need locally. Some sellers offer postage and in some cases you might need to collect the item in person. If you’re lucky, the seller can drop off the item.

Prices are reasonable – I would say they are more than competitive compared to increasingly expensive charity and second-hand shops, particularly in the Copenhagen area.

Sellers can choose whether to offer shipping and have payment processed through the app, in other cases payment is arranged between the buyer and seller. A messaging function allows arrangements to be made.

There are “Mom” and “Home” sections on the app, but it’s for baby and kids’ wares that Reshopper really comes into its own.

I managed to pick up a baby jogger for 450 kroner from a private seller on the app a couple of years ago. I’ve used it frequently since and it has certainly proved worth the money, only needing a couple of new inner tubes during that time.

In addition to downloading the app, I’d recommend following Reshopper on Instagram. They have recently started opening pop-up stores where you can find great deals on clothing, toys and equipment for kids. This is not restricted to used items – you might find new products that have been discarded because they are from previous seasons or have been returned to manufacturers.

Den Blå Avis (DBA)

The legacy option for buying second-hand, DBA started life as a classified ads paper many years ago and can now be browsed as an app or website.

You can find anything on DBA, from sofas to PC components to cars. I bought my car through an ad on the site and, like my baby jogger, I’m happy to say it’s been one of my better purchases and is still going strong two years down the line.

DBA is probably the closest equivalent Denmark has to eBay but should be used with caution because it doesn’t offer the same level of protection to buyers. Many sales still involve transferring money directly to sellers (often using the MobilePay payment app) and trusting them to ship the item. This might go well most of the time but there are scammers out there.

One way to protect yourself is to make sure you only buy from sellers who have verified themselves using Denmark’s MitID digital ID system, a function DBA introduced in recent years.

Unlike eBay, you don’t enter auctions for items on DBA but you can send messages to sellers whose items interest you.

Facebook Marketplace

If you’re on Facebook, you’ve probably come across the Marketplace platform. Now popular in many countries including Denmark, Marketplace has challenged and arguably overtaken DBA as the spot most people sell their unwanted items.

Because it’s populated with sellers keen to shift their goods – and possibly less concerned about the price they receive for them – it can be a good place to pick up a bargain. This is something which is harder to come by than it used to be in physical second-hand stores.

Marketplace can be found on the Facebook app or via this link.

Trendsales

As the name suggests, Trendsales is a clothing-focused platform and is in fact the largest Danish marketplace for used clothing as well as lifestyle items.

You’ll find all sorts of clothing there – it’s not limited to designer or fashion items, so you should be able to pick up a comfortable hoodie from H&M or look for a vintage t-shirt and be in luck.

The interface is easy on the eye and user-friendly, and the prices often surprisingly reasonable. Sellers can choose delivery options and may or may not accept in-person collection.

READ ALSO: How to save money as a student in Denmark

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