EU investigates consumer credit websites

According to the European Commission (EC), UK consumer credit providers are among the worst offenders in providing customers with information they are entitled to by European Law.The UK came second only to Belgium in a list of EU member states where consumer credit websites face further investigation by the EC, after it commissioned a “sweep” in September 2011 of sites offering consumer credit.

The sweep flagged 70% of sites across the EU for further investigation after uncovering problems including: product advertising which did not include the required standard information, offers that omit key information needed to make a decision, and costs being presented in a misleading way.

National enforcement authorities will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action.

The sweep operation checked how businesses are applying the Consumer Credit Directive, which was recently transposed in Member States and aims to simplify the understanding and comparison of credit offers for consumers.

John Dalli, EU consumer commissioner, said: “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.”

The EU’s enforcement authorities checked 562 websites across the 27 Member States plus Norway and Iceland.

In 2010, financial institutions in the eurozone had more than €600 billion outstanding consumer credit.2

Six countries (Italy, Estonia, Latvia, Lithuania, Slovakia, Sweden) conducted a deeper investigation on 57 of the sites checked – the Sweep Plus exercise. The main problems related to pre-contractual information and contract terms.

See full details here