Any idea what are the costs of borrowing some money online? This is not supposed to be a trick question, but it turns out that some credit suppliers are making it more difficult for consumers to understand their conditions than others... This becomes clear when looking at the results of the EU investigation of consumer credit websites that the European Commission published today. The so-called 'Consumer Credit Sweep' took place in September 2011 and was carried out by national enforcement authorities who conducted simultaneous, coordinated checks for breaches in consumer credit law. The sweep operation focused on the way in which businesses apply the Consumer Credit Directive, as implemented in the laws of the Member States. In particular, it was investigated whether consumers received the information to which they are entitled under EU consumer law before signing a consumer credit contract.
A quick look at the results: No less than 70% of the 393 investigated websites were flagged for further investigation. The main topics of concern were:
- 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.
As a follow-up to this Sweep, the European Commission indicates that '[n]ational enforcement authorities will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action. ... 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.'
More news on the Digital Market, in the form of a Green Paper and Action Plan, is expected tomorrow (as announced last week).