Vera Jourova – Photo © European Union 2021
(BRUSSELS) – Consumers are set to gain extra protection when they take out a loan, according to proposals published Wednesday by the Commission revising EU rules on consumer credit and general product safety.
The Commission says it is reinforcing its safety net for EU consumers, for example, by making sure that credit offers are presented to consumers in a clear way, easily readable on digital devices, and that dangerous products are recalled from the market.
The proposal updates both the existing General Product Safety Directive as well as the EU rules on consumer credit to safeguard consumers.
“Consumers face many challenges, especially in the digital world which revolutionised shopping, services or financial markets,” said EC vice-president Vera Jourova, adding “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.”
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.
The EU executive says 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 over-indebtedness. The regulation will ask Member States to promote financial education and to ensure debt advice is made available to consumers.
The Commission proposals will now be discussed by the EU’s Council and Parliament.
General Product Safety Regulation
The General Product Safety Directive, in force since 2001, ensures that only safe products are sold on the EU single market. However, too many unsafe products still circulate on the EU market, creating an uneven playing field for businesses and an important cost for society and consumers. In addition, the rules need to be updated to address challenges linked to new technologies and online sales.
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.
