EU investigates consumer credit websites - a market underperforming for consumers
Brussels, 10 January 2012 - Were you ever about to sign a contract for a personal loan, credit card, or other consumer credit and discovered that it was all working out more expensive than you had first expected? An EU-wide investigation of websites offering consumer credit took place to check whether consumers are receiving the information to which they are entitled under EU consumer law before signing a consumer credit contract. National enforcement authorities checked more than 500 websites across the 27 Member States plus Norway and Iceland. They flagged 70% (393) of sites for further investigation in relation to the following main problems: the advertising did not include the required standard information; the offers omitted key information that is essential for making a decision; the costs were presented in a misleading way. National enforcement authorities will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action. The sweep operation checked in particular how business is applying the Consumer Credit Directive (recently transposed in Member States), which aims to make it easier for consumers to understand and compare credit offers.
EU Consumer Commissioner John Dalli said "When people look forcredit they sometimes discover that this credit turns out to be more expensive than it had originally appeared, because important information was sometimes unclear or missing. Consumer credit is not always easy to understand, which is why there is European legislation in place to help consumers make informed decisions. It is therefore very important that businesses provide consumers with the correct and necessary information. And it is the role of the Commission to work together with national enforcers to make this happen."
What happens next?
The enforcement phase will now start: in the coming weeks and months business operators will be contacted by the national authorities and asked to provide clarifications or correct their websites. Failure to do so, depending on the national legislation which is applicable, can result in legal action leading to fines or even closure of the websites. The national enforcement authorities are asked to report back to the European Commission by autumn 2012. The Commission will report on the results.
For more information: Sweeps website