In a recent verdict by the Supreme Court on increasing mortgage rates, credit institutions Totalkredit and Jyske Realkredit emerged victorious.
The four homeowners who filed the case suffered a tremendous loss.
Increasing contribution rates
In 2018, mortgage banks earned around 18 billion kroner through spiked contribution rates – fees charged to manage the loans – paid by the home-loan borrowers.
The reason cited for the ever-rising contribution rate fees is the lack of competition in the Danish credit market, which is dominated by four major players – Totalkredit, Jyske Realkredit, Nykredit and Nordea Kredit.
‘There is not enough competition in the market at all. Therefore, mortgage banks can freely raise the fees without customers fleeing away,” the Competition and Consumer Authority wrote in its report on the Danish mortgage market.
The case and judgement
The Supreme Court ruled in favour of the credit institutions with the reasoning that a mortgage credit institution has the power beyond contract law rules to unilaterally make changes to the loan agreement because of the special conditions applicable to them.
“It is not possible at the time of the agreement to take into account any change in the regulatory requirements and the financial basis for the mortgage company that may come during the term of the loan,” the statement by the court added.
Before the ruling came in, around 1 million homeowners were expecting compensation for the high contribution rates they’ve already paid.
PostNord under EU investigation
The Danish road freight transport organisation has triggered an investigation of whether the courier company PostNord has received illegal state aid from its two stakeholders: Denmark and Sweden. In October 2017, the two countries agreed to inject capital after falling letter volumes were reported by the courier giant – especially in its subsidiary Post Danmark. Three payments made to PostNord are now being evaluated as they are believed to have been made in non-compliance with EU rules.
Danske Bank accused of cheating 87,000 customers
Danske Bank has been charged with cheating 87,000 customers by making them invest in the company Flexinvest Free in full knowledge there were potential negative returns. The Danish Financial Supervisory Authority (FSA) criticised Danske Bank for misleading its customers and for causing people to lose confidence in the financial world. Danske Bank has promised to pay compensation to the 87,000 customers before the year-end. Meanwhile, the FSA’s decision is due in the autumn.
Stores no longer allowed to reject payments in cash
In a decision last week, the Danish Consumer Ombudsman ruled that shops are not allowed to refuse payments in cash. In accordance with the Payment Act, a store cannot limit the means of paying to just cards and apps such as MobilePay. The rule is also enforceable at kiosks and self-service machines, but does not apply to internet and telephonic purchases.
Legoland to be bought back by its original investors
Kirbi, the money tank behind Lego, has partnered with two other equity funds – Blackstone and CPPIB – to buy back the eight Legoland theme parks it sold to Merlin Entertainment Group in 2005. Together, the three funding companies are ready to shell out 40 billion kroner for the purchase. Kirbi also holds a stake of 30 percent in the Merlin Group.
Top management staff at Amagerbanken must pay 225 million kroner
Amagerbanken’s former chairman Niels Erik Nielsen and seven of its board members have been directed by the High Court to pay 225 million in compensation for their role in leading the bank to bankruptcy in 2011. The verdict came in on Wednesday, overruling a decision in 2017 that had held the previous management liable for the bank’s bankruptcy.