Dodgy consumer credit websites face EU clamp-down
By Bill Newton Dunn MEP
Originally published by East Midlands Liberal Democrats
Have you ever wondered why a personal loan, credit card or auto finance offered online has turned out to be much more expensive than expected? An EU-wide investigation into more than 500 websites offering consumer credit has found that 70% (393) of sites lack at least some of the legally required information to help consumers make an informed decision. In the UK, 38 out of 47 (80%) checked websites revealed irregularities which will now be investigated further by UK Office of Fair Trading.
Commenting after the publication of the initial findings of the 2011 EU Consumer Credit investigation, East Midlands Euro-MP Bill Newton Dunn, said:
"At a time when families are struggling and the effects of the credit crunch are still being felt across the country, it is of paramount importance that consumers in the East Midlands are informed, confident and protected - especially when it comes to borrowing money.
"Finding out how much credit really costs is often complicated and misleading. It is absolutely essential that websites offering consumer credit online contain correct and complete information on the actual terms and conditions. It is essential that businesses comply with EU rules that were introduced to help consumers understand and compare credit offers.
"It is shocking that around 80% of websites checked in the UK do not fully comply with EU consumer credit rules and either do not include the standard information required in their advertisements, such as the annual percentage rate of charge (APR), omit key information on the offer, or do not explain fully the actual costs of undertaking a credit agreement.
"I urge the UK authorities to follow up these irregularities as quickly as possible and ensure that, in future, standard information on consumer credit will be made fully available on all UK websites."
National enforcement authorities are asked to report back to the European Commission by autumn 2012.
Further Information:
As part of the 2011 EU-wide investigation of websites offering consumer credit, it was checked whether consumers are receiving the information to which they are entitled under EU consumer law before signing a consumer credit contract. National enforcement authorities checked more than 500 websites offering consumer credit across the 27 MemberStates, plus Norwayand Iceland. The sweep operation checked in particular how business is applying the Consumer Credit Directive (recently transposed in Member States), which aims to make it easier for consumers to understand and compare credit offers.
An "EU-sweep" is a joint EU enforcement action to check for compliance with consumer protection laws. It involves a targeted and coordinated check on a particular sector. National enforcement authorities then follow up, contacting the noncompliant business operators asking that they come into line with the relevant requirements. Legal action can be taken against operators who violate EU consumer law. National authorities investigate and take enforcement actions for national cases. For cross-border cases, enforcement authorities request assistance from colleagues in other Member States (e.g. where the trader operates from another country). This is done via the Consumer Protection Co-operation Network of national enforcement authorities from 27Member States,Norway &Iceland.
Media contact :
Bill Newton Dunn, T: 0044 7939 250 473, bill.newtondunn@europarl.europa.eu
Ben Zaczek, office of Bill Newton Dunn MEP, T: +32 (0) 228 47 712; ben-zaczek@europarl.europa.eu