The European Union is to update rules on consumer credit to include newer forms of credit available online.
In Brief:
This is a new update to the Consumer Credit Directive.
It will ensure that assessments of consumers’ ability to repay and place caps on charges sch as APR and interest rates.
This will encompass forms of credit including buy now, pay later and short-term, high cost loans.
What does this mean?
Put simply, the European parliament has said that credit advertising should make it clear to consumers that “borrowing money costs money” following concerns that products are not advertised clearly enough, especially those that are aimed at more vulnerable or less financially literate customers. The legislation affects smaller loans right up to €100,000.
