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Consumer credit websites: EU-wide investigation finds a market underperforming for consumers
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An EU-wide investigation of websites offering consumer credit has found only 30 per cent fully comply with EU consumer rules.  Of the 562 websites checked, 393 sites have been flagged for further investigation by national enforcement authorities of EU member states, plus Norway and Iceland.  The main problems detected were: 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. Of the 47 websites checked by the UK's Office of Fair Trading, 38 were found to have some irregularities.

National enforcement authorities, the Office of Fair Trading in the UK, will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action. 

EU Consumer Commissioner John Dalli said: "When people look for credit 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."

He added: "It is 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."

The Consumer Credit sweep took place in September 2011.

The "sweep" operation is an exercise to enforce EU law and was undertaken to check whether consumers are receiving the information to which they are entitled under EU consumer law[1]  before signing a consumer credit contract. And in particular how businesses are applying the Consumer Credit Directive (recently transposed by member states), which aims to make it easier for consumers to understand and compare credit offers.


[1]Consumer Credit Directive, Distance Marketing of Financial Services Directive, Unfair Commercial Practices Directive, E-Commerce Directive, Unfair Contract Terms Directive.

    Consumer credit websites: EU-wide investigation finds a market underperforming for consumers

    Of the 562 websites originally checked, only 30 per cent passed the sweep test for compliance with the relevant EU consumer rules and 70 per cent of these sites (393) were flagged for further investigation. The main problems found were:

    Missing information in consumer credit advertising: advertising on 258 (46 per cent of websites checked) did not include all the standard information required by the Consumer Credit Directive, e.g. i) the annual percentage rate of charge (APR), which is essential to compare offers, ii) information on whether charges on obligatory ancillary services (e.g. insurance) were included in the total cost, or iii) on the duration of the credit agreement;

    Omission of key information on the offer: 244 (43 per cent) websites did not give clear information about all the different elements of the total cost, e.g. i) on the type of interest rate, (fixed, variable or both), ii) on the duration of the credit (if applicable), and iii) on some of the costs related to the credit (e.g. an arrangement fee);

    Misleading presentation of the costs where the cost of the credit is displayed in a way which is false or could deceive consumers, e.g. i) in the way the price is calculated, or ii) if the consumer is not informed that beyond the cost of the consumer credit itself there is an added obligatory insurance.  116 websites (20 per cent) of the websites displayed this kind of problem.

    Sweep Plus
    Six countries (Italy, Estonia, Latvia, Lithuania, Slovakia, Sweden) conducted a deeper investigation on 57 of the sites checked – the Sweep Plus exercise. The main problems related to pre-contractual information and contract terms.

    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.

    A "sweep" is an exercise to enforce EU law. It is led by the EU and carried out by national enforcement authorities who conduct simultaneous, coordinated checks for breaches in consumer law in a particular sector. The national enforcement authorities then contact operators about suspected irregularities and ask them to take corrective action.

    The market under scrutiny is used by consumers daily.  In 2010, financial institutions in the eurozone had more than €600 billion outstanding consumer credit[2].

    Annex  pdf - 18 KB [18 KB]



    [2] ECB, Euro Area Statistics,



    For more information, please contact the London press office on 020 7973 1971.
    Please note: all amounts expressed in sterling are for information purposes only.

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    Last update: 11/01/2012  |Top