Duncan ScottThe EU has adopted the new Directive on Consumer Credits (CCD), repealing and replacing the 2008 Consumer Credit Directive in order to take account of the significant changes that have taken place in the consumer credit sector since then. In particular, the revision recognises the digital transformation that has led to the emergence of new types of products and significant changes to consumer behaviour and preferences.
The directive has been extended so as to cover loans below EUR 200, interest-free credit, and leasing agreements. Under the new rules “deferred payments”, will not be considered as credit if:
- they are not offered by a third party to the transaction for underlying goods or services;
- they are free of interest and without charge (expect for late payment fees); and
- the period of deferral is no longer than 50 days (from the date on which the goods were delivered or the services provided).
Large companies (i.e. those that do not met the EU definition of an SME) providing goods and services online will be exempt provided that any credit is provided by the seller of the goods or services, payment is executed within 14 days of delivery or performance, and (iii) the credit is free of interest and fees.
Under the new rules, the information requirements have also been adapted to ensure they are appropriate for digital devices, and to require prescribed information to be provided free of charge. The CCD also provides for:
- more rules on a proper assessment of a consumer’s creditworthiness prior to offering credit;
- stricter rules on advertising to reduce miss-selling to over-indebted consumers, including details on information that must be included, and banned practices; and
- a right for consumers to withdraw from a credit agreement with no reason within 14 days of its signing.
The will enter into force 20 days after its publication on the Official Journal of the EU. Then, Member States will have 24 months to adopt and publish the national laws necessary to comply.