Report: Private Lending Markets on Social Media in Denmark

In this report, we have assisted the Danish Financial Supervisory Authority in understanding how private lending occurs on social media. Using a mixed-method approach, we have uncovered several lending networks on social media and documented how these networks are organized. Additionally, the report presents the first comprehensive analysis of Facebook-based private loan characteristics in Denmark.

The findings show that 73% of private loans on Facebook are for amounts of 2,000 DKK or less. These loans typically have very short repayment terms, with 96% having a duration of 100 days or less.

While private lending exists in a legal grey area in Denmark, our report demonstrates connections between this market and illegal activities, including undeclared work and potential trading in stolen goods and other questionable items. Furthermore, through multiple case studies, the report reveals concerning debt collection practices, including public shaming of debtors, contacting debtors' family and friends, selling of debt to third parties, hiring private individuals for debt collection, physical visits to debtors' locations, and creation of private debtor databases.

Previous cases also indicate that participants in digital lending environments face additional risks, including exposure to money laundering attempts, fraud, and unwanted sexual advances.

The report has been prepared for the Danish Financial Supervisory Authority and is written in Danish.