Updated: October 2019
Simplification of information
Consumer credit is normally partially executed through the granting of a handful of small operations to
consumers. Those operations are of limited complexity and small amounts, but are, in turn, regulated by
considerably complex rules.
As an example of that, the CCD requires creditors to give excessively detailed information to the consumer
prior to entering a consumer credit agreement. Nonetheless, consumers ignore information which is too
complex or difficult to remember and there is evidence that simpler information with fewer figures is much
more effective at landing critical messages. That information may refer to information that only reflects the
specifics of the product and meets with client’s expectations for short and clear information – for example –
the repayment periods, the amount of the repayment instalments and the applicable interest rate.
Reduction of information
Regarding the pre-contractual information, it is important to focus on diminishing the number of
pre-contractual documents, which banks are obliged to serve to consumers in any case. This approach
has not proved itself to be useful for consumers and for that reason the requirements for serving
pre-contractual information and Standard European Consumer Credit Information aren’t helping in achieving
the objectives of the Directive. Bearing digitalisation in mind, the required information can barely be
presented in a clear and comprehensive way on mobile devices.
The reduction of information may be also observed through the role of the right of withdrawal. The right of
withdrawal is an instrument for the consumer’s protection and when it is granted to the consumer it should
diminish some of the requirements for the service providers, especially in the field of the pre-contractual
information that needs to be provided to consumers. If the amount of information is not diminished,
there is not a substantial meaning of the right of withdrawal.
Regulate activities rather than institutions
In ESBG’s opinion, gold plating practices in the implementation of the CCD by Member States have limited
its effectiveness. Unregulated entities can take advantage of the consumer trust that regulated entities have
gained through the years, and even put that trust at risk if they fail to deliver fair and transparent results,
increasing regulated entities’ reputational risk. Therefore, a strict implementation of the CCD by all Member
States would give consumers better visibility on their level of protection in Europe. In this sense, the CCD
should regulate that consumer credit activity should be a reserved activity and should require the
application of policies on responsible lending, transparency and customer protection.
Creditworthiness assessment requirements should be flexible and preserved for each Member State
and each credit institution
In our view an effective creditworthiness assessment can’t be standardised, because of the following nonexhaustive reasons: