Thu. Oct 6th, 2022

MEPs support updating EU rules on consumer credit to protect consumers faced by new digital options and the difficult economic situation.

Consumer credits are loans for the purchase of consumer goods and services. They are often used to pay for cars, travel as well as for household goods and appliances.

Existing EU rules

The existing EU rules – the Consumer Credits Directive – aim to protect Europeans while fostering the EU’s consumer loan market. The rules cover consumer credits ranging from €200 to €75,000 and require creditors to provide information to allow borrowers to compare offers and make informed decisions. Consumers have 14 days to withdraw from a credit agreement and they can repay the loan early, thereby lowering the cost.

The rules were adopted in 2008 and need to be updated to meet the current environment.

Why changes are needed

The difficult economic situation means more people are searching for loans, and digitalisation has brought new players and products to the markets, including non-banks, such as crowdfunding loan apps.

This means, for example, that it is easier and more widespread to take small loans online – but these can turn out to be expensive or unsuitable. It also means that new ways of disclosing information digitally and of assessing the creditworthiness of consumers using AI systems and non-traditional data need to be addressed.

The current rules do not protect consumers who are vulnerable to over-indebtedness well enough. In addition, the rules are not harmonised between the EU countries.

6 out of 10   consumers have faced financial difficulties sinc…

GDPR Cookie Consent with Real Cookie Banner