EU sweep finds 70% of credit websites breach rules
Up to 70% of EU-based credit websites checked in an EU “sweep” failed to meet consumer law requirements, a survey revealed today.
A total of 562 sites were monitored in the 27 EU countries, plus Norway and Iceland, as part of a co-ordinated investigation – and 393 were found in breach of rules designed to improve clarity for customers seeking personal loans and credit card deals.
Now they are to be probed further by national authorities, the European Commission said today. None of the sites has been named.
In Spain all 29 checked sites fell short; in Belgium 89 out of 93 failed; in France only 11 out of 50 were found wanting.
The Republic of Ireland, with two sites, was one of the countries with no irregularities to follow up. Iceland, where 10 sites were checked and passed, Bulgaria, (six), and Greece (one) were also given a clean bill of health.
EU Consumer Commissioner John Dalli commented: “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.
“It is therefore 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.”
An EU “sweep” operation involves national enforcement agencies co-ordinated by Brussels carrying out simultaneous checks for breaches in consumer law in a particular sector.
The consumer credit sweep took place in September last year, mainly to check how businesses are applying the EU Consumer Credit Directive, designed to make it easier for consumers to understand and compare credit offers.
The main problems uncovered included advertising and credit offers lacking the obligatory consumer information required under the Directive before asking a customer to sign a credit deal.
Nearly 50% of advertising on credit websites failed to include either the annual percentage rate of charge (APR), the inclusion or not of extra services such as insurance, or the duration of the credit agreement.
More than 40% of websites did not give a clear breakdown of costs and 20% of sites presented costs “in a way which is false or could deceive consumers”, said the survey.
A Commission statement said: “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.”
National enforcement agencies have been asked to report back to Brussels by the autumn.
