With 608 votes in favour, 15 abstentions and 8 votes against, the Left secured an important win to protect consumers from unscrupulous lenders in the EU.
The cost of greed crisis is pushing more and more people into poverty. For many, credit cards and short-term loans have become a lifeline. But schemes such as “buy now, pay later” or deferred debit cards, where payment is possible without sufficient funds, can carry high interest rates and often drag consumers into buying something they cannot afford.
According to new rules agreed today in Parliament, consumers will be better protected when it comes to assessment of their creditworthiness, advertising, and overcharging.
Left MEP and rapporteur on consumer credit, Kateřina Konečná (KSČM, Czechia), said: “I believe the legislation that I prepared as rapporteur will substantially protect consumers in the field of consumer credit. And for the first time, we managed to enforce the guarantee of the right to be forgotten for cancer patients in EU legislation. No consumer should be exposed to dangerous financial products or their advertising. This especially applies in the troubled times of the current crisis.”
Highlights of the agreement include:
- The right to be forgotten for cancer survivors;
- Advertising rules must be similar to advertising on cigarette packages and contain a clear and prominent warning that borrowing money costs money;
- Robust creditworthiness assessment must be concluded before entering into a credit agreement;
- Stricter rules on overdraft facilities and credit overrunning, which are increasingly common and expensive forms of credit;
- Consumers will have the right to withdraw and the right to early repayment.
The text will be published in the EU’s official journal. Member states have two years to ensure that the national laws and regulations comply with the Consumer Credit Directive.