Commission revises EU rules on consumer credit

The European Commission has proposed revisions of two sets of EU rules to enhance consumer rights in a world reshaped by digitalisation and the COVID-19 pandemic. The Commission is reinforcing its safety net for EU consumers, for example, by making sure that dangerous products are recalled from the market or that credit offers are presented to consumers in a clear way, easily readable on digital devices. The proposal updates both the existing General Product Safety Directive as well as the EU rules on consumer credit to safeguard consumers.

Věra Jourová, Vice-President for Values and Transparency, said: “Consumers face many challenges, especially in the digital world which revolutionised shopping, services or financial markets. This is why we are stepping up consumer protection on two fronts: we are making it easier for consumers to avoid risks related to having a credit and we are putting even stronger rules for product safety in place. It will also put more responsibility on market players and make it more difficult for bad actors to hide behind complicated legal jargon.”   

Didier Reynders, Commissioner for Justice, said: “The COVID-19 crisis has impacted consumers in multiple ways and many have faced financial difficulties. The digitalisation that has been accelerated by the pandemic, leads to a surge of online shopping and is profoundly changing the financial sector. It is our duty to safeguard consumers, in particular, the most vulnerable ones. With our revision of the existing EU rules on consumer credit and general product safety, that’s exactly what we do!”

Online sales have increased steadily in the last 20 years and in 2020, 71% of consumers shopped online, often buying new technology products. From wireless earplugs and air purifiers to gaming consoles – the market for technological gadgets is vast. The General Product Safety Regulation will address risks related to these new technology products, such as cybersecurity risks, and to online shopping by, introducing product safety rules for online marketplaces. It will ensure that all products reaching EU consumers, through online marketplaces or from the neighbourhood shop, are safe, whether coming from within the EU or from outside. The new Regulation will make certain that marketplaces fulfil their duties so that consumers do not end up with dangerous products in their hands.

The revision of the Consumer Credit Directive provides that information related to credits must be presented in a clear way, adapted to the digital devices so that consumers understand what they are signing up for. Furthermore, the Directive will improve rules with which creditworthiness, i.e. whether or not a consumer will be able to repay the credit, is assessed. This is to avoid the issue of over-indebtedness. The regulation will ask Member States to promote financial education and to ensure debt advice is made available to consumers.

Next steps

The Commission’s proposals will now be discussed by Council and Parliament.

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Consumer Credit Directive Proposal

Directive 2008/48/EC on credit agreements for consumers established a harmonised EU framework for consumer credit and provided a solid framework for fair access to credit for European consumers. However, since its entering into force in 2008 the digitalisation has profoundly changed the decision-making process and the habits of consumers in general. The revision today aims to address these developments.

For more information

Proposal for a Directive on consumer credits

Directive 2008/48/EC on credit agreements for consumers

Factsheet Consumer Credit