Finnish positive credit registry exploited in loan fraud case leads to conviction

A loophole in Finland’s positive credit registry has enabled fraudsters to obtain loans using falsified income data, with a recent court ruling in Hämeenlinna exposing the vulnerability, reports Yle.

A 57-year-old woman was convicted of aggravated fraud in Kanta-Häme District Court in early April after securing a €30,000 loan for a Volkswagen Transporter in 2024. The financing was approved based on income data from the positive credit registry, but the woman failed to make any repayments. Neither she nor the vehicle could later be located by debt collectors.

The case highlights a systemic flaw: the registry, maintained by the Finnish Tax Administration, relies on income data from the national income register, which is not verified by authorities. Instead, employers and benefit payers submit the information directly, leaving room for manipulation.

Marjaana Ohralahti, the registry’s operational lead, confirmed that fraudulent entries—including false income claims—have been reported. “We’ve heard from lenders about isolated cases where incorrect data has been submitted to the income register, sometimes for identity theft or exploitation,” she said.

The positive credit registry, launched in April 2024, excludes negative records like payment defaults or enforcement notices. While individuals can view their own data and set voluntary credit blocks, lenders access partial credit histories when assessing applications. However, the registry omits certain income types, such as entrepreneurs’ capital gains or interest-free loans, limiting its reliability as a sole verification tool.

Ohralahti acknowledged that no quick fix exists but noted upcoming legal changes to the income register in 2025, which may introduce stronger safeguards. Until then, lenders are advised to cross-check data from multiple sources.

The case follows earlier criticism of the registry, particularly from small business owners who claim it misrepresents their earnings. Over 250,000 self-employed individuals are reportedly affected by such discrepancies.